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SPEECHES 


REMONETIZATION  OF  SILVER 


RESUMPTION, 


I)K  M  V  K  1!  Kl) 


.A.  LIP  ZEE  OUST  SO 


OHIO  STATE  CANVASS, 


L877. 


CINCINNATI  : 
-     HOOK    AND    JOB    PRINTING    ESTA1U.I.SI 


1877. 


SPEECH 

OF  THE 

Hon.  ALPHONSO  TAFT 

ON  THE 

REMONETIZATION  OF  SILVER, 

AT 

Sandusky,  0,,  Thursday  Evening,  Sept,  13, '77. 


FELLOW-CITIZENS  —  If  all  laws  prescribing  the  form  and  de- 
nomination of  coins,  and  giving  to  them  the  quality  of  legal 
tender,  were  repealed,  gold  and  silver  would  still  be  the  practical 
measures  of  value  for  the  world,  as  they  were  before  coinage 
began,  when  "Abraham  weighed  to  Ephron  the  silver,"  the  price 
paid  for  "the  cave  of  Macphelah,  "  and  as  they  are  now  in 
China,  where  silver  is  the  only  currency,  and  passes  by  weight, 
without  regard  to  its  formor  coinage^y^Their  indestructible  and 
lianCquafiHes,  their  convenient  divisibility,  their  rareness  for 
other  uses,  and  yet  their  sufficiency  for  a  medium  of  exchange, 
and  the  utter  want  of  any  other  metal  or  material  fitted  for  a 
universal  currency,  have  long  since  fixed  their  destiny,  and 
every  attempt  by  legislation  to  prevent  or  defeat  that  destiny 
has  been  a  signal  failure.  Accumulated  by  the  mining  industry 
of  ages,  they  now  exist  as  a  reliable  and  constant  measure  of 
the  values  of  all  other  property  in  the  world.  Our  ideas  of 
pecuniary  values  have  originated  in  them  —  their  quantity,  and 
the  cost  of  producing  them.  How  poorly  th 


appreciates  this^i^rtbaarsql  blessing  jvhich 
fijsfied  tp_  mankind  !  The  quantity  of  these  metals  that  has  been 
made  available^By  the  labor  of  man,  in  all  past  time,  and  which 
now  remains  in  use,  amounts  to  not  far  from  ten  thousand  mil- 
lions of  dollars,  and  is  almost  equally  divided  between  gold  and 
silver.  As  coins  they  are  durable.  "Rust  doth  not  corrupt 


2  REMONETIZATION    OF   SILVER. 

them."  They  are  convenient,  and  every  coin  is  a  medal.  Coins 
have  brought  to  our  time  important  historical  facts  from  remote 
antiquity,  and  still  have  been  continually  used  as  a  true  and  con- 
venient measure  of  values.  If  the  quantity  of  these  precious 
metals,  at  the  present  time,  instead  of  being  ten  thousand 
millions  of  dollars,  had  been  but  five  thousand  millions,  the  prices 
of  all  property  would  have  been  less.  Not  that  the  precious 
metals  are  equal  in  value  to  the  total  of  all  other  forms  of  value, 
nor  that  the  reduction  of  their  entire  amount  would  necessarily 
reduce  the  prices  of  all  property  in  the  exact  proportion  of  that 
reduction,  but  that  prices  do  very  largely  depend  upon  the 
quantity  of  the  precious  metals,  and  their  distribution  through- 
out the  world. 

Uhese  metals  have  a  use,  for  which  they  seem  to  have  been 
nely^set   apart.      They    perform    the    certain    function    of 
measuring  all  the   values  of   exchangeable  property.      If  they 
were  more  plenty  they  would  be  cheaper,  and  prices  would  be 
higher,  and  if  they  were^  less  plenty  they  would  be  dearer,  and 
Their  increase  in  the  world  has  kept  pace 


(  with  their  consumption  in  the  arts,  their  loss  by  friction,  and  the 
increased  demand  by  the  growth  of  property  interests  incident 
to  the  increase  of  the  world's  population  and  wealth. 

I  do  not  mean  that,  in  the  thousands  of  years  during  which 
men  have  been  at  work  in  the  mines,  these  metals  have  not 
grown  in  quantity,  as  compared  with  other  values,  and  the  uses 
to  which  they  have  been  destined,  and  that,  consequently,  prices 
have  not  grown  ;  but  that  growth  has  been  so  imperceptible  as 
to  be  detected  only  by  the  comparison  of  different  centuries. 

The  supply  of  the  precious  metals,  therefore,  for  each  genera- 
tion of  people,  is  practically  constant,  and  forms  a  just  andper- 
manent  measure  of  value  for  all  generations,  and  for  all  nations. 
This  is  a  matter  of  inestimable  importance  to  the  civilized  world. 
Prices  have  thus  been  formed  in  all  time  on  this  basis.  Our 
lands,  our  cattle  and  our  merchandise  are  all  measured  by  the 
world's  precious  metals.  These  measures  of  value  exist  every- 
where, and  have  always  existed,  and  denote  the  values  of  all 
kinds  of  property  as  truly  as  the  weights  upon  one  end  of  the 
scale  show  us  how  heavy  a  body  is  that  is  balanced  upon  the 
other.  These  ideas  of  value  have  been  the  growth  of  ages. 
Although  different  natipnsJiaiEJnadejhese  metals  into  different 


REMON1TIZATION    OF   SILVER.  3 

coins,  each  putting  upon  them  its  peculiar  stamp,  still  the  ex- 
changeable value_of_gach  foreign  coin  is  easily  ascertained^and 
practically  \  the  precious  metals  form  one  universal  currency 
measuring  the  valueslHroughout  the  civilized  world.  Whenever 
any  country  or  any  part  of  a  country  attempts  to  do  business  on 
some  other  currency  of  less  value,  prices  rise,  and  we  are  con- 
scious that  these  prices  arc  too  high.  ^We  have  a  certain 
instinctive  sense  of  what  prices  ought  to  be,  and  that  sense  has 
grown  out  of  thjjjvelljgnown  and  uniform  relation  between  the 
precious  metals  and  aU  other  values.  So  long  as  the  nations  ad- 
here to  this  legitimate  money,  prices  are  maintained  throughout 
the  world  at  nearly  uniform  rates,  and  exchanges  of  property 
and  international  transactions  are  effected  without  material  loss 
or  inconvenience.  All  or  nearly  all  nations  have  originally 
used  what  is  properly  denominated  the  double  or  optional 
standard  of  value,  regarding  both  metals  as  money  at  a  ratio 
between  them  which  each  country  prescribes  for  itself.  This 
has  been  the  general  condition  of  the  monetary  world  from  the 
beginning  of  history,  and  from  before  the  beginning  of  civilza- 
ion,  to  the  present  century.  It  prevailed  in  all  the  great  empires 
of  antiquity,  and  has  prevailed  equally  among  Christian  nations. 
The  ratio  between  the  two  metals  has  undergone  some  varia- 
tions. The  prevailing  ratio  in  the  Roman  Empire  was  13.33  to 
I.  But  in  some  countries  it  has  been  greater  or  less  than  in 
others,  at  the  same  time.  The  result  has  followed  that  each 
metal  has,  for  the  time  being,  tended  to  the  countries  where  it 
was  most  highly  valued,  though  it  was  lawful  money  everywhere. 
In  this  state  of  things  it  was  not  very  important  whether  both 
gold  and  silver  remained  in  every  country,  or  whether  one 
country  should  have  gold  and  another  silver.  The  result  was 
the  same,  or  nearly  the  same,  as  to  the  maintenance  of  uni- 
formity in  prices.  Both  metals  were  in  full  use  as  currency.  If 
one  country  accumulated  too  much  of  one  metal,  it  would  flow 
off  to  where  it  could  buy  more  property.  The  demonetization 
of  either  of  these  metals — that  is,  declaring  by  law  that  but  one 
shall  be  a  legal  tender  in  payment  of  debts — has  been  of  recent 
origin,  and  has  a  very  different  effect,  from  the  causing  a  metal 
to  leave  the  country  by  over  valuing  the  other  metal.  In  the 
latter  case  the  holder  of  the  coin  has  an  option  to  send  his  coin 
to  any  country,  and  in  using  that  option  will  select  that  where 


4  REMONETIZATION    OF    SILVER. 

the  ratio  is  most  favorable,  if  there  is  a  difference.  But  in  the 
case  of  demonetization,  one  metal  is  absolutely  excluded  as 
lawful  money.  But  even  this  process  of  demonetization  by  a 
single  nation  of  a  metal  would  not  have  much  effect  to  depre- 
ciate it,  so  long  as  it  is  recognized  as  money,  and  wanted  by  all, 
or  a  large  majority  of  other  nations. 

Gold  and  silver  have,  therefore,  held  their  own  with  a  nearly 
constant  ratio,  till  the  present  century. 

In  this  connection  it  is  well  to  consider  how  fortunate  it  is, 
that  so  much  has  been  done  in  time  past  in  producing  the 
precious  metals,  and  that  the  stock  has  become  so  large  in  the 
world  that  they  do  not  fluctuate,  and  can  not  be  cornered.  If 
the  precious  metals  were  all  to  be  remanded  to  their  original 
condition,  and  we  were  now  to  begin  again  to  extract  them  from 
the  earth  and  coin  them  into  money,  our  currency  would  neces- 
sarily be  inadequate  and  inconstant.  A  large  yield  in  a  partic- 
ular year,  a  bonanza  in  California,  or  in  some  other  part  of  the 
earth,  would  cause  a  great  and  inconvenient  change  in  prices. 
A  loss  by  accident  of  a  quantity  of  coin  would  have  a  like  effect, 
and  it  would  be  easy  for  stock  jobbers  and  speculators  to  corner 
the  money  market.  But  the  quantity  is  now  so  vast,  and  so 
well  distributed  over  the  earth,  that  the  irregularities  of  pro- 
duction or  of  consumption  have  no  appreciable  effect.  They 
are  like  the  waters  of  the  ocean,  which  are  distributed  over  the 
face  of  the  globe,  but  which,  if  by  chance,  or  by  some  tem- 
porary cause,  they  are  heaped  up  in  one  place,  will  soon  seek 
their  proper  level,  and  if  depressed  in  any  one  place,  will  soon 
fill  that  place,  from  the  fluid  mass  above,  always  tending  to  a 
general  level.  So  it  is  and  must  be  with  the  distribution  and 
use  of  coin  as  a  legitimate  currency.  -We  can^not  afford  to  ciiL 
s  off  from  this  universal  medium  of  the 


Jender  paper  money;  and  if  we  have  done  so,  for  some  tempo- 
rary reason,  as  was  our  case  in  the  war,  the  sooner  we  regain~our 
old  ^nETaTiori  rn  rV|e  nriancial  world,  without  unnecessary  shock  to- 
be  forbotrTtheput^ 


perity.  On  this  subject  the  country  has  reason  to  expect  from 
the  Republican  party  an  honest  and  straightforward  policy,  ad- 
vancing steadily  and  surely  to  specie  payments,  while  the  Dem- 
cratic  party  and  their  platform  afford  to  the  country  no  such 
assurance. 


REMONETIZATION    OF   SILVER. 


REMONETIZATION. 


Whether  silver  shall  be  re  monetized,  and  on  what  terms,  have 
become  questions  of  paramount  importance  to  the  country,  in 
view  of  the  approaching  resumption  of  specie  payments.     I  am 
decidedly  iaJayorjof  complete  remonetization,  and  of  the  coin- 
age  of  the  silver  dollar,  containing  as  it  has  done  since  1792, 
37l/£  grams  of  pure_silver.     This  subject  has  been  discussed  by 
many   learned   writers,    philosophers,    bankers,    politicians   and 
orators  of  this  and  other  countries.      It  is  of  national  and  of  in- 
ternational importance.     It  affects  the  convenience  of  exchanges 
between    different   countries,   and  the  relation  between  debtors 
and  creditors,  whether  individual  or  national.      In  reading  an)H 
author  upon  this  subject,  it  is  necessary  to  observe  the  stand-  I 
point  of  interest  from  which  he  writes,  and  the  interest  of  the  \ 
country  to  which  he  belongs. 

It  has  been  said  that  silver  has  become  depreciated  by  over- 
production. But  the  statement  is  groundless.  The  demand  for 
it  has  been  suddenly  and  exceptionally  dimished  by  demonetiza- 
tion, and  by  suspensions  of  specie  payments  in  countries  having 
silver  as  their  specie  standard. 

In  1797,  England,  while  engaged  in  the  continental  wars  with 
Napoleon,  suspended  specie  payments.  Up  to  that  time  she 
had,  like  the  rest  of  the  world,  used  the  double  standard  of  gold 
and  silver.  This  suspension  of  specie  payments  continued 
about  twenty-five  years.  In  ^816^  before  any  serious  effort  to 
resume  was  made,  and  while  neither  metal  was  in  actual 
act_of_parliament  was  gat-Jiirough  demonetizing  silvej\ 
measure  was__brought  about  by  the  aristocratic^wealth  of 

beneficial  to  what  has-been  called  the 


plutocracy,  butwhen  the_j^sjAmrj>tior^  in  gold  came,  it  was  not 
beneficial  to  ttie~English  people.  Nor  can  I  suppose  that,  while 
England  stood  alone  in  her  exclusion  of  silver,  her  position  se- 
riously affected  the  value  of  that  metal.  It  replaced  in  other 
countries  the  gold  which  was  absorbed  by  Great  Britain,  and  was 
as  much  in  demand  as  before. 

But  in  1871  the  German  Empire,  which  prior  to  that  time 
had  the  single  standard  of  silver,  and  which  had  just  exacted 
a  thousand  millions  of  dollars  in  gold  from  France,  changed  its 
standard  from  silver  to  gold.  In  1873,  the  United  States 


O  REMONETIZATION    OF    SILVER. 

stopped  coining  the  silver  dollar  (except  the  trade  dollar  for  use 
in  Asia,  which  need  not  be  particularly  noticed  here),  and  in 
1874,  took  away  its  character  of  legal-tender  for  sums  above 
five  dollars.  This  accomplished  its  demonetization.  In  1876, 
France,  Italy,  Belgium,  Switzerland  and  Greece  entered  into 
what  they  denominated  the  Latin  Union,  for  limiting  the  coin- 
age of  silver- in  their  respective  countries,  to  protect  themselves 
from  the  apprehended  influx  of  silver  from  Germany.  Mean- 
time, Russia  and  Austria,  whose  specie  standard  is  silver,  are 
under  a  suspension  of  specie  payments,,  furnishing*  no  market 
for  silver,  and  have  even  let  go  what  they  had.  This  action  of 
the  leading  commercial  nations  of  the  world  accounts  for  the 
present  depreciation  of  silver. 

_Mr.  Ernest  Seyd,  in  his  recent  work  on  "The  Fall  in  the 
Price  of  Silver,"  makes  the  distinction  between  nations  that  are 
internationally  rich  and  those  that  are  internationally  poor,  by 
which  we  are  to  understand  that  nations  which  are  indebted  to 
other  nations,  or  to  the  people  of  other  nations,  however  rich  in 
their  posessions,  are  internationally  poor,  and,  on  the  contrary, 
that  those  whose  indebtedness  is  held  at  home,  and  the  people 
of  which  also  hold  the  indebtedness  of  the  Government  and 
people  of  other  nations,  are  internationally  rich.  England,  Ger- 
many, France,  Holland,  Switzerland,  with,  perhaps,  Denmark 

i  and  Sweden,  are  creditors.  Austria,  Russia,  Italy,  the  United 
States,  the  British  Colonies,  Spain,  Portugal,  Turkey,  with,  per- 
haps, the  South  American  Republics,  are  debtors.  England  and 

1  Germany  may,  perhaps,  be  regarded  as  the  largest  creditors. 
The  United  States  may,  perhaps,  be  regarded  as  the  largest 
debtor,  Her  bonds  and  the  indebtedness  of  her  people  are  held 
in  vast  amounts  in  England  and  in  Germany.  England  holds 
more  than  five  thousand  millions  of  foreign  secureties,  Germany 
more  than  twenty-seven  hundred  millions,  and  France  more  than 
twenty-five  hundred  millions,  making  an  aggregate  of  more 
than  ten  thousand  millions,  of  which  England  and  Germany 
have  more  than  eight  thousand  millions.  When  we  realize  that 
the  value  taken  from  silver  is  added  to  gold,  we  can  comprehend 
the  paramount  interest  of  the  creditor  nations,  at  the  present 
time,  in  regard  to  the  single  and  double  standard. 

Whatever  enhances  the  value  of  the  medium  in  which  those 
foreign  securities   are    to    be    paid,    increases  the  value   of  the 


REMONETIZAT1ON    OF    SILVER.  / 

bonds,  or  other  forms  of  credit  in  the  hands  of  the  creditor, 
and  adds  to  the  burden  of  the  obligation  on  the  part  of  the 
debtor.  The  same  distinction  exists  between  the  interest  of 
the  individual  creditor  and  debtor  at  home.  These  differences 
and  opposing  interests  are  never  to  be  lost  sight  of,  in  the  dis- 
cussion of  the  currency  which  is  to  pay  our  debts  at  home,  as 
well  as  our  debts  abroad. 

I  have  said  that  the  ideas  of  the  value  of  property  de- 
pended on  the  quantity  of  the  precious  metals.  Silver  has 
contributed  as  much  to  the  standard  of  value,  as  Gold.  It 
has  contributed  to  the  world's  stock  of  coin  nearly  one-half; 
for  a  large  part  of  the  history  of  the  world  more  than  one-half, 
and  at  the  present  time  it  does  not  fall  far  below  it.  Although 
a  much  larger  amount  of  silver  is  used  in  the  arts,  yet,  when 
we  take  into  consideration  the  vast  population  of  Asia,  who 
use  silver  as  their  only  currency,  and  the  several  countries  of 
Europe  and  South  America  that  use  silver  as  their  only 
standard,  or  the  double  standard  of  silver  and  gold,  and  the 
estimated  amount  of  silver  coin  existing  in  those  countries,  it 
is  clear  that  in  the  aggregate  silver  contributes  nearly  one-half 
of  the  currency  in  circulation  at  the  present  time.  The  popu- 
lation of  the  countries  which  have  the  silver  standard  alone  is 
much  greater  than  of  those  that  have  the  gold  standard  alone, 
and,  in  fact,  greater  than  both  those  that  have  the  gold  standard 
alone  and  those  that  have  the  double  standard ;  including  as 
they  do  the  most  populous  nations  of  Asia,  and  Austria  and 
Russia  in  Europe.  But  the  United  States  are  now  ranking 
among  those  that  have  the  gold  standard  alone.  France  still 
retains  the  double  standard. 


8  REMONETIZATION    OF    SILVER. 

The  following  table  is  interesting,  as  showing  how  the  silver 
and  gold  have  been  distributed  through  the  world: 

OOUNTRIES  HAVING  THE  SILVER  STANDARD  ALONE, 

POPULATION.' 

Austria-Hungary  37,700,000 

€ostaRica ' 200,000 

Argentine  Republic 2,000,000 

China 425,000,000 

Columbia  3.000,000 

Equador 1,000,000 

Guatemala  1,200,000 

Honduras 300,000 

India 190,000,000 

Mexico 9,300,000 

Nicaragua 250,000 

Peru , 2,700,000 

Russia  86,500,000 

San  Salvador 600,000 

Tripoli 1,000,000 

Tunis 2,000,000 

Total 762,750,000 

OOUNTRIES  HAVING  THE  GOLD  AND  SILVER  STANDARD, 

POPULATION. 

Belgium 5,350,000 

Bolivia 2,000,000 

Algeria 2,500,000 

France  36,100,000 

•Greece 1,500,000 

Italy :.....  27,500,000 

Netherlands 4,000,000 

Spain    16,500,000 

Switzerland 2,700,000 

€uba  and  Porto  Rico 2,000,000 


Total  100,150,000 


REMONETIZATION    OF    SILVER.  9 

OOUNTKIES  HAYING  THE  GOLD  STANDARD  ALONE. 

POPULATION. 

Brazil 10,000,000 

Australia 2,000,000 

Canada  and  other  British  Colonies  in  North  America 

and  the  West  Indies 5,000,000 

'Chili 2,000,000 

Denmark 2,000,000 

Egypt 17,000,000 

Oreat  Britain JJ1, 000,000 

Germany 42,700,000 

Hawaiian  Islands 100,000 

Japan ^,000,000 

Liberia 700,000 

Norway  1,800,000 

Portugal 4,300,000 

Sweden 4,400,000 

Turkey 28,000,000 

United  States 88,500,000 

Total 22:',,100,000 

Here,  as  will  be  seen,  are  twenty-six  countries  still  using 
-silver  as  a  legal  tender,  and  sixteen  countries  in  which  silver 
has  been  demonetized. 

Although  it  appears  by  this  table  that  gold  forms  the  currency 
of  some  nations  and  silver  of  some,  and  some  countries  have 
the  double  standard,  yet,  in  a  cosmopolitan  sense,  we  may  still 
regard  them  as  universal.  The  two  supply  the  world  with 
money.  The  withdrawal,  however,  of  any  great  commercial 
•country  like  the  United  States  from  the  use  of  either  metal 
.affects  its  value.  But  the  entire  value  of  the  total  of  both 
metals  remains  constant.  The  prices  of  the  world  have,  in  fact 
been  based  upon  the  quantities  of  both. 

No  man  can  say  how  much  the  value  of  gold  or  of  silver 
would  be  reduced  if  it  were  demonetized  throughout  the  world; 
but  as  both  are  used  mainly  as  money,  it  is  reasonable  to 
suppose  that  it  would  lose  more  than  half  its  value.  The 
recent  fall  in  the  price  of  silver  has  not  been  caused  by  any 
over-production  of  that  metal.  It  is  to  be  remembered  that  in 
1873-4,  when  the  legislation  was  enacted  by  Congress  which 
demonetized  silver,  it  was  worth  more  than  gold  by  three  per 
cent.,  according  to  the  legal  ratio  of  sixteen  to  one  existing 
here  between  gold  and  silver.  Since  that  time  there  has  been 


IO  REMONETIZATION    OF   SILVER. 

a  fall  in  the  price  of  silver.  It  has  not  been  by  the  over- 
production of  silver,  for  the  plain  reason  that  the  statistics  of 
the  mining  of  these  metals  show  that  during  each  year  since 
silver  was  demonetized,  the  product  of  gold  has  been  greater 
in  value  than  that  of  silver;  and,  in  the  second  place,  this  very 
fact  of  demonetization  of  silver  on  the  part  of  the  United 
States,  together  with  the  change  of  the  German  Empire  from 
the  silver  to  the  gold  standard,  with  the  pressure  on  the  part 
of  England  to  proselyte  other  nations  to  its  policy  of  the  single 
standard  of  gold,  account  in  the  most  satisfactory  manner  for 
the  depreciation  of  silver.  If  the  whole  civilized  world  should 
demonetize  one-half  of  its  precious  metals,  the  effect  \vould  be 
to  leave  us  in  the  same  condition  as  if  the  entire  currency  of 
the  world  were  contracted  to  that  extent.  The  demonetizing 
of  silver,  or  of  gold  would  have  substantially  the  same  effect. 
England,  Germany  and  the  United  States  are  not  the  whole 
world,  and  cannot  drive  silver  from  France  or  the  Asiatic 
nations;  yet,  by  driving  it  out  of  their  own  realms,  they  can 
depreciate  it.  It  would  remain  money  in  other  parts  of  the 
world,  but  by  withdrawing  the  markets  of  England,  Germany 
and  the  United  States,  the  demand  for  it  would  be  greatly  re- 
duced ;  at  the  same  time  the  demand  for  gold  would  be  equally 
increased.  It  was  clearly  an  oversight  when  the  United  States 
followed  England  and  Germany  into  the  demonetization  of  silver. 
It  was  not  the  work  of  either  party;  it  was  an  inadvertence. 
But  it  was  a  plain  contraction  of  the  basis  of  our  currency,  and, 
as  we  had  immense  debts  to  pay  to  England  and  to  Germany, 
we  wanted  all  our  legitimate  currency  to  pay  them  with.  Eng- 
land and  Germany,  as  we  have  seen,  held  enormous  amounts  of 
our  bonds,  and  bonds  of  other  Nations,  and  were  interested  to 
have  the  interest  and  principal  paid  in  a  medium  as  valuable  as 
possible.  If,  by  the  demonetization  of  silver,  gold  shall  be 
made  more  valuable  as  compared  to  property,  their  bonds  will 
be  just  so  much  more  valuable  to  them,  and  will  be  just  so 
much  harder  for  the  United  States  to  pay,  if  they  shall  submit 
to  the  contraction  of  their  own  currency  by  excluding  silver. 
The  amount  they  will  gain  by  the  decline  which  has  been 
already  brought  about  through  the  demonetization  of  silver  and 
the  appreciation  of  gold,  is  more  than  seven  per  cent,  on  the 
whole  amount,  and  will  go  on  increasing,  unless  it  shall  be 


REMONETIZATION    OF    SILVER.  I  I 

resisted  and  checked.  The  United  States  was,  and  is  under  no 
obligation  to  join  in  the  crusade  against  silver.  In  1873,  it  is 
true,  when  the  silver  dollar  was  three  per  cent,  more  valuable 
than  the  gold,  Congress  ceased  to  coin  silver,  and  in  1874,  by 
the  Revised  Statutes,  it  limited  its  use  as  a  legal  tender  to  five 
dollars.  As  our  currency  in  circulation  consisted,  and  still  con- 
sists of  paper,  the  effect  has  been  less  in  the  past  than  it  wil. 
be  in  the  future,  if  this  state  of  things  continues. 

Of  the  power  of  Congress  to  restore  silver  to  its  old  place 
in  the  currency,  I  have  no  doubt.  The  American  silver  dollar, 
as  adopted  in  1792,  was  the  successor  to  the  Spanish  milled 
dollar,  which  had  been  made  a  legal  tender  by  act  of  Congress, 
and  was  in  general  circulation.  It  contained  the  same -quan- 
tity, viz:  371^  grains  of  pure  silver,  and  it  has  remained  the 
same  to  this  day,  nothwithstanding  the  change  made  in  the 
gold  dollar  when,  in  1834,  the  ratio  of  1 6  to  I  was  adopted  in 
place  of  15  to  i.  The  Funding  Act  of  July  14,  1870,  for  the 
purpose  of  retiring  the  five-twenty  six  per  cent,  bonds,  pro- 
vides for  the  issue  of  bonds  bearing  interest  at  five,  four  and 
a  half,  and  four  per  cent.,  to  the  aggregate  amount  of  fifteen 
hundred  millions  of  dollars,  which  were  made  ''redeemable  in 
coin  at  tJie  present  standard  value,  bearing  interest  payable  in 
such  coin."  In  the  Resumption  Act  of  1875,  the  Secretary  of 
the  Treasury  was  authorized  "to  issue,  sell  and  dispose  of,  at 
not  less  than  par  in  coin,  either  of  the  description  of  bonds  of 
the  United  States  described  in  the  act  of  Congress  approved 
July  14,  1870."  All  the  bonds  of  the  United  States,  therefore, 
whether  under  any  of  the  acts  of  Congress  prior  to  the  fund- 
ing act  of  1870,  or  under  that  act,  are  redeemable  in  coin  of 
the  standard  value  of  July  14,  1870,  of  which  the  ancient  silver 
dollar  was  one.  I  find  nothing  in  our  legislation  to  prevent  a 
provision,  by  act  of  Congress,  for  coining  the  silver  dollar, 
to  be  a  legal  tender  without  limit.  On  the  other  hand,  the  re- 
monetization  of  silver  will  not  prevent  us  from  paying  our 
bonds  in  gold.  It  is  not  necessary  that  I  should  say  in  this 
discussion  what  discretion  ought  to  be  exercised  by  the  Govern- 
ment in  the  use  of  silver  or  gold  coin  in  the  payment  of  bonds 
which  may  have  been  taken  under  assurances  that  they  would 
be  redeemed  in  gold.  Our  government  will,  undoubtedly,  act 
in  the  highest  good  faith,  and  will  not  permit  purchasers  of 


12  REMONETIZATION    OF   SILVER. 

bonds  to  be  deceived  as  to  the  medium  in  which  they  shall  be 
paid. 

Congress  could,  by  express  enactment,  provide  for  the  issue 
and  sale  of  bonds  payable  in  gold.  But  all  that  is  material  to 
this  discussion  is  the  conclusion  that  there  is  no  constitutional, 
or  legal,  or  moral  objection  to  the  provision  by  act  of  Congress 
for  the  coining  and  putting  into  circulation  the  old  silver  dollar, 
and  making  it  an  unlimited  legal  tender  in  payment  of  debts. 

But  aside  from  the  question  of  constitutional  power  there  is 
nothing  in  the  history  of  the  country,  nor  even  in  the  legisla- 
tion of  the  country,  that  ought  to  create  the  expectation  on  the 
part  of  the  creditors,  national  or  individual,  that  silver  should 
be  permanently  excluded  from  the  currency  of  the  United 
States.  All  changes  in  the  standard  of  values  affect  the  rela- 
tions between  debtors  and  creditors,  and  should  not  be  made 
without  clear  and  urgent  reasons.  They  are  sometimes  una- 
voidable. But  how  much  more  just  would  it  be  to  restore 
silver  to  its  old  place  now,  as  we  are  about  to  enter  upon  the 
resumption  of  specie  payments,  than  it  was  three  years  ago,  to 
exclude  it  ?  That  was  an  incipient  wrong,  which  has  done  more 
by  its  influence  abroad  to  depreciate  silver,  than  by  any  actual 
•disuse  at  home,  for  the  reason  that  our  currency  in  circulation 
has  been  paper.  What  influence  our  legislation  against  silver 
may  have  had  in  its  depreciation,  we  shall  not  know  until  it  has 
been  restored.  But  in  the  great  warfare  of  England  for  the 
exclusion  of  silver,  we  find  ourselves  unexpectedly,  and  against 
tour  own  interests,  on  the  side  of  England. 

It  is  claimed  that  silver  is  so  cheap  now,  that  it  would  be  a 
sort  of  repudiation  to  pay  our  debts  in  a  medium  so  much  less 
valuable  than  gold.  We  have  seen  how  it  has  happened  that 
the  value  which  has  been  taken  from  the  silver,  has  been  added 
to  gold.  By  restoring  the  silver  dollar  it  is  probable  that  it 
would  so  far  regain  its  old  value  as  to  be  equal  to  gold,  which 
it  exceeded,  when  demonetized,  by  three  per  cent.  It  is  urged 
by  some  who  advocate  the  double  standard,  that  the  old  ratio 
of  sixteen  to  one,  which  \vas  adopted  by  the  act  of  1834, 
isolates  the  United  States  from  the  rest  of  the  world,  and  will 
•drive  gold  out  of  the  country. 

Mr.  Cernuschi,  who  was  called  upon  to  testify  before  the 
United  States  Monetary  Commission,  and  who  has  written 


REMONETIZAT1ON    OF    SILVER.  13 

learnedly  upon  the  subject,  insists  that  the  ratio  of  fifteen  and 
one  half  to  one,  which  is  the  ratio  adopted  by  France  and  the 
Latin  Union,  should  be  also  adopted  by  the  United  States,  and 
he  goes  so  far  as  to  say  that  unless  we  adopt  that  ratio,  it  would 
be  better  to  "maintain  greenbacks."  I  am  at  a  loss  to  under- 
stand how  he  could  entertain  such  an  opinion.  But  he  is,  after 
all,  a  citizen  of  France,  one  of  the  creditor  nations  of  the  world, 
and  not  concerned  as  a  debtor  in  the  payment  of  international 
debts.  He  seems  to  overlook  the  vast  interest  which  the  United 
States  has  as  a  debtor  to  England  and  France  and  to  Germany, 
in  the  discussion  of  this  subject,  while  he  confines  his  attention 
to  the  matter  of  exchanges,  and  the  question  of  what  country 
shall  have  the  most  gold  in  actual  circulation. 

An  act  changing  the  ratio  from  sixteen  to  one,  to  fifteen  and 
a  half  to  one  might  not  be  unconstitutional.  But  all  our  exist- 
ing debts  were  contracted  while  our  legal  ratio  between  silver 
and  gold  was  sixteen  to  one,  and  such  an  act  would  authorize 
the  payment  of  our  bonds  with  a  less  amount  of  silver,  than 
would  have  been  required  by  law  when  the  bonds  were  issued. 

It  is  not  at  all  probable  that  the  acts  demonetizing  silver 
would  ever  have  passed,  if  the  use  of  metallic  currency  had  not 
been  at  the  time  suspended.  It  is  a  remarkable  coincidence' 
that  England  was  led  into  the  same  measure,  while  under 
suspension  of  specie  payments.  This  also  accounts,  in  part, 
for  whatever  financial  distress  followed  the  resumption,  a  few 
years  after,  on  gold  alone.  We  do  not  propose  to  fall  into  the 
same  mistake. 

There  are  many  reasons  for  retaining  silver  as  a  standard  of 
value.  Mr.  Cernuschi  makes  a  good  argument  in  favor  of  Eng- 
land's returning  to  the  bi-metallic  standard,  and  shows  how 
much  better  it  would  be  for  her  East  India  colonies,  that  use 
the  silver  standard  alone,  and  by  the  present  depreciation  of 
that  metal  are  made  to  deal  with  England  at  a  ruinous  loss. 
Yet  England  is  inflexible.  He  shows  how  much  more  con- 
venient and  fair  it  would  be  to  use  both  metals,  and  looks  to 
either  a  general  agreement  among  nations  in  favor  of  the  re- 
monetization  of  silver,  or  to  a  concurrence  of  the  Latin  Union, 
consisting  of  France,  Belgium,  Italy,  Switzerland  and  Greece, 
with  the  United  States,  to  withstand  the  influence  of  England 
and  Germany.  In  all  this  speculation  concerning  the  supposed 


14  REMONETIZATION    OF    SILVER. 

"parliament  of  man,"  and  in  the  prediction  of  failure  unless 
we  act  with  the  Latin  Union,  and  make  the  ratio  of  our  silver 
coin  fifteen  and  a  half  to  one  instead  of  our  old  dollar,  which 
is  sixteen  to  one,  he  evidently  is  looking  to  the  reasons  which 
should  influence  a  Frenchman,  rather  than  to  those  that  most 
interest  the  United  States.  Undoubtedly  it  would  facilitate  in- 
ternational exchanges  to  have  the  same  ratio  adopted  by  all 
nations,  and  if  not  by  all  nations,  by  as  many  as  practicable; 
but  the  great  reason  that  is  and  should  be  paramount  with  us, 
that  we  owe  moneys  at  home  and  abroad  which  we  have  agreed 
to  pay  in  silver  or  gold,  with  the  ratio  of  sixteen  to  one,  bears 
differently  on  France,  which  is  a  creditor  with  no  foreign  debts 
to  pay.  While  we  may  well  go  to  France,  therefore,  for  her 
experience  and  advice,  we  may  not  follow  her  advice  too  im- 
plicitly. 

England  and  the  United  States  have  distinct  interests  on  this 
subject,  not  only  as  creditors  and  debtors,  but  also  as  producers 
of  the  precious  metals.  Gold  at  present  is  chiefly  a  British  pro- 
duct, as  will  appear  from  the  following  estimated  annual  gold 
product  of  the  world,  at  the  latest  dates  for  which  the  statistics 
are  attainable  in  the  various  reports : 

The  United  States,  1875 $26,000,000 

Australia,  &c.,  1872  58,000,000 

British  Columbia   2,000,000 

Canada  and  Nova  Scotia 500,000 

Other  British  possessions  and  British  Isles 1,500,000 

Total  British  possessions $62,000,000 

Balance  of  the  world 30,000,000 


Total  world $118,000,000 

From  this  table  it  will  be  observed  that  of  the  $118,000,000 
which  represents  the  annual  product  of  the  world,  fifty-two  and 
one-half  per  cent,  was  obtained  in  countries  over  which  the 
British  flag  waved,  or  which  were  subject  to  British  domination. 

Silver,  on  the  contrary,  is  at  present  chiefly  an  American  pro- 
duct, as  will  appear  from  the  following  estimate.  The  most 
authentic  returns  I  have  been  able  to  obtain  are  for  the  year 
1873,  as  follows: 


REMONETIZATIOX    OF    SILVER.  15 

Great  Britain  and  Colonies $1,000,000 

Sweden  and  Norway L'~>0,000 

Russia 500,000 

Austria-Hungary 1,600,000 

German   Empire 3,000,000 

France 2,000,000 

Italy  500,000 

Mexico 20,000,000 

Central  America  and  South  America 8,000,000 

Canada 000,000 

United  States 36,500,000 

Total $76,250,000 

By  still  more  recent  returns  it  appears  that  at  the  present  time 
the  entire  annual  product  of  silver  is  but  about  $70,000,000,  of 
which  the  United  States  produces  $45,000,000,  and  all  the  rest 
of  the  world  less  than  $30,000,000.  England  and  her  depend- 
encies produce  less  than  $2,000,000.  These  figures,  together 
with  the  characteristic  insular  sentiment  of  England  wherever 
she  has  an  interest,  account  for  her  utter  indifference  to  the  fate 
of  silver,  which  she  neither  mines  nor  coins. 

If  we  allow  the  war  upon  silver  to  go  on  with  our  concur- 
rence, or  without  our  determined  opposition,  we  betray  our  own 
interests  as  producers  of  silver.  That,  however,  is  far  less  im- 
portant than  that  we  maintain  bur  right  to  the  aid  of  silver  in 
resuming  specie  payments,  and  in  paying  our  debts.  These 
two  reasons  have  small  influence  with  France,  which  has  no 
foreign  debts  to  pay,  nor  any  silver  mines  to  work.  Her 
writers,  therefore,  like  the  English,  may  well  be  expected  to 
have  but  a  faint  appreciation  of  our  case. 

Our  people  are  also  divided  into  two  classes,  according  to 
their  own  individual  interests,  that  is,  into  creditors  and  debtors. 
The  large  creditors  are  much  more  likely  to  join  in  the  crusade 
against  silver,  than  those  who  have  large  debts  to  pay.  Hence, 
we  witness  powerful  efforts  to  form  public  opinion  on  the  subject, 
and  the  press  is,  to  a  large  extent,  controlled  by  the  authority 
of  wealth,  in  large  cities,  where  the  money  power  is  most  felt. 

The  general  object  should  be  to  have  each  metal  coined  at 
its  intrinsic  value,  that  both  metals  may  be  retained  in  our  cir- 
culation. This,  the  opponents  of  silver  say,  is  impossible. 
But  it  can  be  done  as  well  as  it  has  been  done  in  the  thousands 
of  years  of  silver  coin  which  have  passed.  It  has  been  said,  by 


l6  REMONETIZATION    OF    SILVER. 

way  of  discouragement,  that  we  have  been  unfortunate  in  our 
past  experience,  because  we  have  sometimes  a  little  over-valued 
one  metal,  and  sometimes  we  have  over-valued  the  other,  and' 
have  been  able  to  have  in  full  circulation  but  one  at  a  time.  It 
is  desirable  that  both  silver  and  gold  coin  should  circulate  at 
the  same  time,  and  I  am  persuaded  that  such  will  be  the  case, 
to  a  large  extent,  if  the  old  dollar  shall  be  restored  and  coined 
freely.  France  keeps  her  gold  and  silver  coin  in  full  circulation, 
at  a  ratio  of  fifteen  and  one-half  to  one,  thus  valuing  silver  at 
three  and  one-third  per  cent,  above  our  standard,  which  is  six- 
teen to  one.  Yet  her  gold  does  not  depart  from  the  country. 
She  would  not  take  our  silver,  for  the  reason  that  she  has  what 
silver  she  wants,  and  limits  her  coinage  of  silver.  She  holds 
both  silver  and  gold  in  convenient  proportions. 

Germany,  it  is  supposed,  would  flood  us  with  silver.  But  the 
silver  that  Germany  has,  is  not  demonetized.  It  is  an  unlimited 
legal  tender.  It  has  only  stopped  its  coinage,  and  I  do  not 
believe  that  if  the  American  Government  shows  that  it  intends, 
to  stand  firm,  Germany  will  be  willing  to  part  with  her  silver 
at  our  ratio  of  sixteen  to  one.  We  have  reason  to  expect  that 
our  silver  coin,  with  its  ratio  of  sixteen  to  one,  will  regain  a 
part  of  the  value  lost  by  the  demonetization  and  the  general 
war  upon  it,  and  that  as  it  was  before  three  and  one-third  above 
gold,  it  will  rise  to  par  with  it  by  the  time  we  shall  have  drawn 
from  the  silver  market  a  hundred,  or  a  hundred  and  fifty,  or  even 
two  hundred  millions  which  will  not  be  more  than  a  reasonable 
supply.  At  any  rate,  it  would  be  a  grave  wrong  to  ourselves 
to  permit  our  silver  coin  to  be  depreciated  below  its  intrinsic 
value  by  the  adv  ?rse  influence  of  our  creditors,  without  an 
effort  to  maintain  it.  And  as  it  is  obvious  that  our  remoneti- 
zation  of  silver  at  the  old  ratio  would  raise  its  value  as  com- 
pared with  gold,  we  should  not  give  up  that  advantage. 

Nor  is  there  any  danger  from  unlimited  coinage.  It  would 
require  three  years  to  coin  a  reasonable  supply  of  silver  for  one- 
half  of  our  metallic  currency.  Meanwhile  its  tendency  will  be 
upward.  If  there  should  ever  be  any  occasion  to  interpose  by 
law  to  restrict  the  coinage,  which  I  do  not  believe,  it  could  be 
done  when  we  shall  have  become  as  well  supplied  with  silver 
coin,  as  France  and  Germany  now  are.  If  France  had  no  more 
silver  coin  than  we  have,  she  would  not  have  thought  of  re- 
stricting the  silver  coinage. 


REMONK  FIXATION    OF    SIL\  KK.  I  J 

But  if  it  should  turn  out  that  our  silver  is  really  over-valued,  '• 
which  I  do  not  believe,  the  ratio  itself  can  be  changed  after  a 
full  opportunity  to  observe  the  course  of  exchanges,  and  the 
effect  of  remonetization.  ~"  As'lsIIver  was  not  over-valued  in 
1873  and  1874,  when  ifwas  demonetixed,  and  as  the  new  pro- 
duct of  silver  has  since  that  time  been  less  than  that  of  gold, 
the  presumption  is  that  it  is  not  over-valued  now,  and  we  are 
bound  out  of  a  decent  respect  for  ourselves  and  our  national 
interests,  to  try  it. 

There  is  not  likely  to  he  so  much  difficulty  in  fixing  and  main- 
taining the  proper  ratio  between  gold  and  silver  as  some  have 
supposed,  for  the  reason  that  if  the  Government  establishes,  as 
it  has  done,  a  ratio  which  it  regards  as  correct,  and  which  is  not 
in  fact,  far  from  correct,  the  miners  themselves  will  help  to 
keep  them  /;/  equilibria.  If  it  shall  be  more  profitable  to  mine 
gold,  they  will  let  the  silver  mines  rest,  and  1'icc  rcrsa.  So 
potent  is  law  on  this  subject,  that  a  concurrence  of  the  nations 
in  establishing  a  ratio  would  make  it  permanent  and  universal, 
and  both  metals  would  circulate  freely. 

It  is  not  of  the  greatest  importance  that  the  precious  metals 
should  be  in  the  United  States  in  equal,  or  in  anything  like 
equal  proportions.  It  should  be  our  object  to  make  the  ratio 
as  correct  as  possible,  and  if  the  different  nations  could  agree 
upon  the  ratio,  there  would  be  no  more  difficulty  on  that  sub- 

^W*10*"^ ••••^••^ "^* ^ i^ •      •^"•^••••••*^taM"MMW^M^MM»^**M^aMMMnMnHHM^MMM_^^^^^^^^H 

ject;  for  the  law  and  the  mining  interest  together,  would  hold 
them  in  their  respective  orbits,  as  surely 'as  gravitation  holds 
the  earth  and  the  moon  in  their  circles  around  the  common 
centre  of  gravity. 

But  I  regard  the  idea  of  anything  like  a  universal  agreement 
of  the  nations  on  this  subject,  at  present,  as  chimerical.  I  see 
not  the  slightest  ground  to  hope  that  England  will  give  up 
her  position  and  prejudices  against  silver.  Professor  Jevons, 
I  think,  represented  the  English  mind  on  the  subject  at  the 
meeting  of  scientific  gentlemen  at  Saratoga,  a  few  days  since, 
where  he  seemed  to  complain  that  the  United  States  should 
stand  in  the  way  of  having  silver  cheap  enough  to  be  used  for 
culinary  and  household  purposes,  and  declared  that  nothing 
could  change  the  English  Government  and  people  from  their 
position.  He  assumes  that  the  United  States  will  stand  alone, 
or  only  with  such  nations  as  China  and  India.  It  is  quite 


1 8  REMONETIZATION    OF    SILVER. 

impossible  to  imagine  an  intelligent  mind  more  entirely  oblivious 
of  anything  outside  of  the  self-interest  and  prejudices,  or  what 
he  himself  describes  as  unreasonable  "conservatism"  of  the  ruling 
classes  of  that  country  on  the  currency. 

This  waiting  for  the  "parliament  of  man,"  or  waiting  to  have 
an  agreement  with  nations  whose  interest,  if  not  hostile  to,  is 
different  from  our  own,  would  prove  a  failure,  and  be  wholly 
unworthy  of  our  national  character.  We  can  meet  these  nations 
hereafter,  whenever  they  shall  invite  us,  or  show  an  encouraging 
disposition.  Meanwhile,  we  have  to  resume  specie  payments, 
and,  with  gold  and  silver  money  we  can  do  it.  But  we  have 
no  time  to  lose.  It  is  important  that  our  mints  be  run  to  their 
full  capacity.  It  will  require  more  than  three  years  to  get  out 
as  much  silver  as  we  can  conveniently  use,  without  detriment 
to  the  gold  we  must  also  have.  There  is  at  present  estimated 
to  be  from  one  hundred  and  fifty  to  two  hundred  and  fifty 
millions  of  dollars  of  the  precious  metals  in  the  country,  one- 
seventh  only  of  which  is  silver. 

Among  the  alarming  consequences  of  our  coining  the  old 
silver  dollar,  it  has  been  said  that  we  should  be  flooded  with 
the  old  silver  thalers  of  Germany,  which  are  supposed  to  be 
thrown  out  of  use  at  home  by  the  change  from  the  silver  to  the 
gold  standard  of  the  German  Empire,  in  1871.  It  is  not  worth 
our  while  to  be  too  easily  alarmed.  In  the  first  place,  if  the 
Germans  send  us  their  old  silver  for  our  gold,  they  will  have  to 
pay  the  market  rates  for  it.  .But  when  the  standard  of  value 
was  changed  in  Germany,  how  was  it  done?  The  gold  mark, 
of  23.82  cents,  was  made  the  unit  of  value,  and  the  silver  thaler 
was  retained  as  an  unlimited  legal  tender,  one  thaler  valued  at 
three  gold  marks,  and  the  coinage  of  the  thaler  was  stopped. 
The  thaler  is  as  good  as  ever  to  the  German,  and  the  ratio  at 
which  it  is  a  legal  tender  is  about  fifteen  and  one- half  to  one; 
that  is,  one  ounce  of  gold  in  Germany  is  worth  but  fifteen  and 
one-half  ounces  of  silver  in  the  payment  of  domestic  debts  and 
in  the  purchase  of  property.  Is  it  probable  that  the  thrift}' 
Germans  will  bring  their  silver  to  America  and  pay  it  off  for 
gold  at  our  ratio  of  sixteen  to  one — that  is,  buy  one  oui  ce  of 
gold  for  sixteen  ounces  of  pure  silver,  and  take  the  gold  home 
where  it  would  not  be  legally  worth  but  fifteen  and  one-half 
ounces  of  silver?  If  so,  let  them  come.  We  want  s:  ver  from 


REMONETIZATIOX    OF    SILVER.  19 

some  source,  and  may  as  well  take  it  from  them  as  from  others. 
There  should  be  no  limit  to  the  legal  tender  of  silver,  and  the 
coinage  should  be  pushed  vigorously,  and  I  do  not  believe  it 
necessary  to  enact  any  limit  to  the  amount  to  be  coined,  as  the 
Latin  Union  have  done  by  agreement.  Our  condition  is  not 
that  of  the  Latin  Union.  If  the  course  of  events  shall  make 
it  necessary,  as  I  trust  it  never  will,  a  restriction  can  be  enacted 
in  the  future.  Three  years  hence  will  probably  be  soon  enough 
to  make  any  such  provision.  An  unnecessary  limitation  would 
tend  to  discourage  our  friends  abroad,  who  are  also  interested 
in  maintaining  the  position  of  silver  as  a  currency.  The  pros- 
elytism  of  England  on  this  subject  is  fearful.  She  shuts  her 
eyes  to  the  interest  of  her  vast  Asiatic  colonies  from  which  she 
has  derived  so  much  of  her  wealth,  where  silver  is  the  principal, 
if  not  the  only  currency.  By  depreciating  silver  she  has  caused 
her  own  colonies  to  deal  with  her  at  a  loss  of  from  ten  to  twenty 
per  cent,  on  all  their  immense  annual  transactions.  That  the 
home  Government  should  be  willing  to  depreciate  the  necessary 
circulating  medium  of  such  rich  and  populous  colonies  under  its 
protection,  would  be  a  righteous  cause  for  resistance  and  re- 
bellion. The  Government  of  India  is  reported  to  have  declared,  ' 
* '  That  famine,  war,  and  drought  are  for  India  lesser  evils  than  ' 
is  the  depression  of  silver  in  London." 

Whether  it  be  expedient  for  our  Government  to  make  the 
coinage  of  silver  free  to  all  comers  at  the  cost  of  mintage,  or  to 
coin  only  on  Government  account,  may  not  be  at  present  entirely 
clear.  Free  coinage  is  to  be  preferred,  unless  there  should  be 
developed  some  inconvenience  or  danger,  which  I  am  not  willing 
to  anticipate.  But  the  essential  thing  is,  that  the  silver  mints 
should  be  immediately  employed  to  their  full  capacity,  until  the 
country  is  well  supplied  with  silver  coin,  both  the  subsidiary  / 
coin  and  the  silver  dollar. 

Mr.  David  Wells,  who  has  taken  an  interest  in  this  subject, 
has  communicated  his  views  to  the  public.  He  takes  ground 
against  the  silver  dollar,  and  his  principal,  if  not  only  reason,  is 
that  silver  is  too  heavy  and  bulky  to  be  carried  conveniently  in 
the  pocket.  For  small  change  it  would  be  more  convenient 
than  gold,  and  I  think  it  would,  to  a  considerable  extent,  take 
the  place  of  one  dollar  notes.  There  can  be  no  doubt  that  the 
silver  dollar  would  be  popular  with  the  people.  But  what 


2O  REMONETIZATION    OF    SILVER. 

renders  the  objection  of  Mr.  Wells  groundless  is,  that  the  Amer- 
ican people  are  accustomed  to  have  their  money,  for  any  con- 
siderable payments,  in  the  form  of  paper,  and  would  not  carry 
either  silver  or  gold  in  their  pockets,  beyond  very  small  sums. 
Our  business  transactions  will  be  carried  on  in  some  form  of 
paper  circulation.  The  greenbacks  already  issued  will  be  made 
convertible,  but  will  probably  remain  in  circulation,  until  further 
legislation  shall  require  them  to  be  "retired  and  cancelled." 
We  shall  unquestionably  have  banks,  and  the  Government  may 
issue  notes  for  circulation,  not  as  legal  tender,  b»t  to  be  con- 
vertible into  specie.  I  do  not  propose,  in  this  speech,  to  dis- 
cuss the  question  what  paper  shall  be  used  as  our  ordinary 
circulation.  But  the  provision  already  made  by  the  National 
Banks  and  by  the  free  banks,  all  of  which  are  required  to  make 
their  paper  absolutely  secure  by  the  purchase  and  deposit 
with  the  Government,  of  Government  bonds,  with  power  in 
the  Government  to  sell  them,  if  needed,  to  pay  the  circulation, 
affords  as  good  a  currency  as  can  be  desired.  No  system  could 
be  more  absolutely  secure,  and  I  am  sure  that  the  Republican 
party  will  never  consent  to  authorize  any  banking  to  be  done 
with  paper  less  secure.  The  system  of  State  banks,  wThich  the 
,  /.  1 1  Democratic  platform  of  1875  recommended,  would  fall  far  short 
of  this  National  security.  I  think  that  the  Government  should 
|  not,  itself,  become  a  banker  by  issuing  any  more  circulation. 
The  power  to  create  circulation  is  a  dangerous  power  to  place 
in  the  hands  of  a  body  of  politicians.  No  one  can  tell  what 
might  some  time  be  done  by  them  under  high  political  excite- 
ment. 

The  National  debt  has  a  felicity  in  furnishing  security  for 
bank  paper,  beyond  anything  hitherto  discovered.  It  is  to  be 
hoped  that  neither  party  will  prove  so  reckless  of  the  country's 
safety,  as  to  reject  the  plan  of  supplementing,  by  National  bonds, 
the  ordinary  reserve  of  coin  in  bank  for  the  payment  of  the  cir- 
culation. By  the  observance  of  this  caution  we  may  have  a 
plentiful  supply  of  paper  circulation  for  business  purposes, 
without  risk  of  any  possible  loss  to  the  public.  Its  prompt 
convertibility  will  rest  on  the  specie  it  represents,  while  its  ab- 
solute security  from  loss  to  the  holder  will  rest  upon  the  public 
credit.  Meantime  the  gold  and  silver  coins  will  be  in  use, 
sufficiently  to  make  us  familiar  with  their  peculiar  beauties  for 


REMONETIZATION    OF   SILVER.  21 


both  the  eye  and  the  ear.  Business  men  will  be  happy,  because 
they  can  find  encouragement  for  their  best  energies.  Capitalists 
will  be  happy,  because  there  will  be  no  longer  a  want  of  profit- 
able investment  for  their  capital.  \Yorkingmen  will  be  happy, 
because  they  will  no  longer  want  employment  at  remunerative 
prices.  The  National  credit  will  certainly  suffer  no  serious 
injury.  With  the  balance  of  trade  with  Europe  in  our  favor, 
and  increasing,  with  specie  payments  well  assured,  and  with  all 
our  mines  and  our  mints  in  full  operation,  and  our  public  debt 
showing  a  reduction  every  month,  our  public  credit  can  not  be 
successfully  cried  down  by  all  the  bulls  and  bears  that  infest 
the  money  markets  of  the  world. 


THE  POLICY   OF  RESUMPTION. 


SPEECH 

OF 

JUDGE   TAFT, 

AT 

Cincinnati,  0,,  Saturday  Evening,  September  15th,  1877, 

FELLOW-CITIZENS — The  historian,  who  in  the  future  shall  re- 
cord the  great  political  events  of  the  nineteenth  century,  will 
find  none  more  important  to  the  liberties  of  mankind,  than  those 
which  have  transpired  on  the  continent  of  America  during  the 
sixteen  years  in  which  the  Republican  party  has  controlled  the 
destiny  of  the  United  States.  The  Republican  party  came  into 
existence  of  necessity.  The  perils  of  liberty  compelled  the 
friends  of  free  government  to  resist  the  tendency  to  barbarism 
and  slavery.  No  party  has  ever  had  such  questions  to  solve, 
nor  such  formidable  oppositions  to  overcome.  It  has  grappled 
with  the  greatest  questions,  deliberated  upon  them,  decided 
them,  and  executing  its  decisions,  has  advanced  to  other  prob- 
lems which  could  not  be  avoided.  It  has  been  courageous, 
thoughtful,  and  in  the  main,  consistent  and  successful.  Its 
achievements  form,  and  will  ever  form,  the  most  interesting  and 
brilliant  chapter  of  American  history. 

Of  the  Democratic  party  it  is  only  necessary  to  say,  that  it  has 
consistently  and  strenuously  opposed  all  the  great  and  necessary 
achievements  of  the  Republicans ;  that  in  doing  so,  it  has  belied 
its  ancient  and  time-honored  principles,  and  forfeited  its  claim 
to  the  confidence  of  the  country. 

Much  as  the  Republican  party  has  already  accomplished,  there 
remains  a  broad  field  for  future  achievements.  I  do  not  propose 
to  enumerate  all  the  important  principles  and  measures  to  which 
it  stands  pledged.  The  most  instant  and  pressing  problems  now 
to  be  solved,  relate  to  the  resumption  of  specie  payments  and 
to  the  currency.  The  stress  of  civil  war,  which  destroyed  our 


THE    POLICY    OF    RESUMPTION.  2$ 

credit  abroad  for  the  time  being,  made  it  necessary  to  issue  the 
greenbacks  and  make  them  legal  tender  in  payment  of  pre-exist- 
ing, as  well  as  future  debts.  Nothing  but  the  exigencies  of  a 
great  war  could  have  justified  the  Government  in  such  a  measure. 
In  the  opinion  of  the  Supreme  Court  of  the  United  States  and 
in  the  judgment  of  mankind  the  Government  was  justified  in 
resorting  to  this  extraordinary  measure,  and  the  Supreme  Court 
but  expressed  the  enlightened  opinion  of  the  civilized  world, 
when  it  said,  that  the  justification  for  such  a  measure  would 
cease  with  the  passing  away  of  the  emergency. 

As  the  Democratic  party  opposed  the  war  for  the  Union,  and. 
this  necessary  measure  to  carry  it  on,  so  when  the  war  had  been 
successfully  brought  to  a  close,  it  has  opposed  the  recurrence  by 
the  Government  to  a  sound  currency,  and  now  insists  upon  the 
continuation,  in  time  of  peace,  of  the  issue  of  irredeemable  legal- 
tender  paper,  which  could  and  can  only  be  justified  by  the 
emergencies  of  war,  demanding  "the  immediate  repeal  of  the 
Resumption  act,"  and  calling  for  the  "retention  of  greenback 
currency."  The  reading  of  these  clauses  of  the  Democratic 
platform  for  18/7,  in  connection  with  that  adopted  by  the  same 
party  in  Ohio,  in  18/5,  "demanding  that  the  volume  of  the 
(paper)  currency  be  made  and  kept  equal  to  the  wants  of  trade," 
and  with  a  clause  in  the  National  Democratic  platform  of  1876 
denouncing  the  Resumption  act  of  1875,  and  "demanding  its 
repeal,"  shows  that  party  to  be  utterly  reckless  of  the  obliga- 
tion of  the  country  to  return  to  a  sound  currency. 

The  issue  of  legal-tender  paper,  though  necessary,  was  a  tem- 
porary expedient,  and  was  so  regarded  by  the  people  at  the 
time;  and  when  the  war  was  over,  in  1865,  both  parties  con- 
curred in  the  enactment  of  a  law  authorizing  the  Secretary  of 
the  Treasury  to  take  up  four  millions  of  greenbacks  per  month, 
in  order  to  reduce  the  currency  to  its  normal  and  proper  volume, 
and  facilitate  the  return  to  specie  payments.  The  Secretary  <>f 
the  Treasury,  Mr.  McCollough,  proceeded  under  that  authority 
until  he  had  withdrawn  forty-four  millions  of  the  greenback  cur- 
rency, when  Congress  moved  by  political  alarm  .and  outcry, 
withdrew  the  authority.  I  have  always  believed  that  if  that  ; 
measure  had  been  suffered  to  proceed,  we  should  have  long  since 
been  able  to  resume  specie  payments  without  detriment  to  busi- 
ness, and  should  have  avoided  the  panic  of  1873,  and  many  other 


.24  THE    POLICY    OF    RESUMPTION. 

-embarrassments.  The  difficulty  in  resuming  specie  payments  is 
mainly  political.  The  party  which  is  out  of  office  is  able  to 
avail  itself  of  the  possible  reduction  of  the  currency  to  its 
normal  condition  preliminary  to  the  resumption  of  specie  pay- 
ments, to  create  an  alarm  in  the  public  mind,  by  repeating  and 
vociferating  in  the  popular  ear,  that  contraction  is  ruining  the 
country,  charging  every  man's  poverty,  and  every  man's  disap- 
pointment upon  the  Government,  and  by  asserting  that  all  the 
.suffering  and  all  the  distress  to  which  human  life  is  always  heir, 
are  chargeable  to  the  want  of  irredeemable  paper  currency. 
The  Republican  party  having  the  control  of  the  National  Govern- 
ment, and  responsible  for  the  proper  measures  to  secure  a  sound 
currency,  though  much  delayed  in  its  action  by  this  political 
-opposition,  has  made  decided  progress ;  and,  whereas,  two  years 
ago,  in  1875,  when  the  Democratic  orators  in  Ohio  were  urging 
.a  continuance  of  the  greenback  currency  as  the}'  are  to-day,  the 
difference  between  paper  and  specie  was  more  than  thirteen  per 
cent.,  it  has  now  been  reduced  to  four,  and  from  week  to  week- 
is  "growing  beautifully  less." 

Nevertheless,  the  Democratic  orators  now,  as  confidently  as 
then,  declare  against  the  return  to  specie  payments,  and  seem 
to  be  disappointed  that  we  have  come  so  nearly  to  a  sound  cur- 
rency. There  has  been  a  depression  in  various  branches  of 
business  for  a  considerable  time.  The}'  avail  themselves  of 
these  circumstances  to  charge  all  the  inconvenience  of  such  de- 

-hcn  the  evidence  is  perfectly 
but  want  of  business,  that 
[{  has  caused  the  depression.  The  chief  embarrassment  of  the 
Democratic  leaders  now  arises  from  the  apprehension  that  a 
thorough  revival  of  business  is  approaching.  But,  as  the  rising 
credit  of  the  country  and  the  reduction  of  interest  upon  its  public 
•debt  has  not  discouraged  their  opposition  to  the  financial  meas- 
ures of  the  Government,  so  a  revival  of  the  business  of  the 
country  and  universal  prosperity  will  not  prevent  their  reiter- 
ating and  vociferating  the  coming  on  of  ruin  for  the  want  of 
irredeemable  paper  currency. 

Their  complaints  and  their  denunciations  are  groundless. 
Their  sinister  predictions  are  vain.  It  has  been  found  impossi- 
ble in  the  history  of  the  business  v  •  avoid  occasional,  if 
not  periodical  panics  and  depressions.  Any  unusual  general 


,   these  circumstances  to  charge  all  the 

pression  to  the  want  of  currency,  wh< 
•\   .clear  that  it  is  not  want  of  currency, 


THE    POLICY    OF    RKSTMI'TIOX.  25 

change  in  investments  in  a  country  is  likely  to  be  followed  by 
disappointment  to  some,  and  even  in  times  of  peace,  business 
depressions  and  panics  have  occurred  as  often  as  once  in  eight 
or  ten  years  in  our  country,  and  oftener  in  England.  ^n  the 
history  of  our  country,  during  the  last  sixteen  years,  under  the 
Republican  Adminstration,  the  wonder  has  been  that  more,  and 
more  frequent  financial  panics  have  not  been  experienced.  The 
vast  demand  in  time  of  war  for  the  productions  of  our  man- 
ufacturers of  iron,  cotton,  wool,  and  of  all  the  materials  of  war, 
and  of  eventhing  that  was  made  necessary  by  the  war,  caused 
the  sudden  expansion  of  the  manufacturing  power  of  the  country, 
and  the  investment  of  the  great  majority  of  the  capital  of  the 
country  in  the  manufacturing  establishments  which  sustained 
and  carried  the  arm)*  through  its  four  years  of  service.  When 
the  war  was  over,  capital,  with  its  characteristic  inertia,  remained 
in  the  gigantic  establishments  where  it  had  been  placed  during 
the  war,  and  produced  iron  and  other  articles  of  manufacture 
far  beyond  the  wants  of  the  country  in  time  of  peace.  The 
result  has  been  great  over-production  in  the  country.  The 
natural  consequences  oi  this  over-production  to  labor  and  in- 
dustry, was  postponed  by  the  energy  of  business  men  and  the 
prudence  of  the  Government,  from  year  to  year,  far  beyond  the 
time  fixed  by  the  philosophers  and  political  economists  of  the 
Democratic  party.  But  the  effects  of  the  necessary  change  of 
capital  from  the  purposes  to  which  it  had  been  directed,  in  time 
of  war  to  other  and  different  investments,  though  for  a  time 
postponed,  could  not  be  entirely  avoided. 

Those  effects  are  sufficient  to  account  for  the  panic  of  1873, 
and  the  embarrassments  which  the  business  of  the  country  has 
experienced,  since  they  involve  not  merely  the  great  and  various 
changes  of  the  investments  of  vast  amounts  of  capital,  but  also 
a  change  of  the  employments  on  the  part  of  the  people,  who 
had  been  collected  from  the  country  and  agricultur.il  employ- 
ments, to  the  cities  and  populous  points,  where  the  great  man- 
ufacturing establishments  were  carried  on.  It  has  become 

'  "^^    *BBMMMMMBMHMM« 

ssary  that  the  population    so   called   together   should,    to 
considerable    extent,    be   again    distributed    to   agricultural    pur- 
suits, where  they  may  be   equitably   compensated   for  their  in- 
.  ciustry.      From  this  gvr,  '^satisfaction  among  the  cm- 

ployed,  and  disappointment  among  the  employers  were  inevitable. 


26  THE    POLICY    OF    RESUMPTION. 

s  Time  and  the  characteristic  good  sense  of  the  American  people,, 
both  those  who  have  acquired,  and  those  who,  by  their  labor, 
are  acquiring  capital,  will  readjust  the  various  industries  of 
the  country,  and  mollify  and  finally  remove  the  hardships  of 
which  they  now  complain.  This  desirable  consummation  may 
undoubtedly  be  facilitated  by  legislation  in  collecting  and  dis- 
tributing correct  and  practical  knowledge  of  the  facts,  from 
which  every  man  can  form  a 'just  judgment  of  his  own  interest. 

But  our  Democratic  speakers  assume  without  proof,  that  the 
sufferings  of  the  people  of  this  country  exceed  the  sufferings  of 
I  all  other  people,  of  all  other  countries,  and  of  all  other  times, 
and  that  they  have  but  one  cause,  and  that  is  the  want  of  irre- 
vX??  deemable  paper  money.  They  assume  this  as  a  fact  without 
proof,  and  against  the  plainest  evidence.  The  credit  of  our 
country  never  was  better.  No  Government  has  yet  been  able 
to  negotiate  its  bonds  at  par,  for  less  interest  than  four  per  cent., 
and  here  at  home,  money  has  never  borne  a  less  interest  than 
it  does  at  the  present  time,  nor  at  any  time  have  there  been 
larger  amounts  of  unemployed  capital  in  the  form  of  currency 
than  at  present.  What  good,  then,  could  an  increase  of  the 
volume  of  currency  do  to  the  laboring,  or  any  other  class  of 
the  community  ? 

Now,  the  fact  that  there  is  abundant  money  accumulated,, 
ready  for  use,  and  as  much  capital  as  there  ever  has  been  in  the 
form  of  unemployed  currency,  shows  that  is  not  want  of  currency 
that  keeps  men  out  of  profitable  employment.  It  has  been  as- 
"sumed  by  the  Democratic  orators  that  the  contraction  of  currency 
produced  the  panic  of  1873,  and  has  produced  all  the  financial 
embarrassments  since.  This  assumption  is  made  absurd  by  the 
fact  that  there  was  no  contraction  in  1873.  The  volume  of  cur- 
rency remained  as  large  as  it  ever  had  been  before,  and  very 
much  larger  than  it  was  before  the  war. 

~  It  is  true  that  there  was  during  the  war,  and  for  a  year  or  two 
afterward,  growing  out  of  the  settlement  of  the  war  claims,  an 
amount  of  floating  and  temporary  debt,  in  the  form  of  Treasury 
notes  bearing  interest,  compound  interest  notes,  and  certificates 
of  indebtedness,  which  General  Gary  and  Mr.  Ewing,  in  the 
political  campaign  of  1875,  called  currency,  and  because  they 
were  paid  and  merged  into  a  funding  debt,  they  called  it  contrac- 
tion of  the  currency.  This  had  all  happened,  however,  previous 


THE    POLICY    OF    RESUMPTION.  2/ 

to  the  first  election  of  General  Grant  to  the  presidency, 
five  years  before  the  panic.  The  legitimate  currency  of  the 
country,  consisting  of  the  United  States  notes  and  the  circula- 
tion issued  by  the  banks,  amounted  to  about  seven  hundred 
millions  of  dollars,  and  from  1868  to  1873,  when  the  panic 
occurred,  the  amount  had  increased,  instead  of  diminished, 
fifty  millions,  and  that  is  the  contraction,  to  which  these  Demo- 
cratic philosophers  ascribe  the  panic.  It  is  also  to  be  borne  in 
mind  that  during  the  entire  first  term  of  President  Grant's  ad- 
ministration the  business  interests  of  the  country  were  unusually 
prosperous.  There  was  no  lack  of  currency  to  do  the  business 
of  the  country;  employment  was  plenty,  and  business  enter- 
prises were  entered  upon  with  hope  and  success.  The  panic 
came  with  the  same  volume  of  currency  that  had  existed, 
slightly  increased,  and  that  volume  of  currency  has  not  been 
sensibly  diminished  since.  There  is  the  same  plethora  of  cur- 
rency now  that  there  was  before,  and  the  only  diminution  that 
has  happened  in  the  circulation  has  arisen  from  the  voluntary 
surrender  by  the  banks  of  the  privilege  of  issuing  currency 
which  they  could  not  profitably  employ,  amounting  to  not 
exceeding  fifty  millions,  leaving  the  currency  slightly  less  in 
amount,  while  in  its  value,  it  is  vastly  greater  than  in  1869,. 
when  the  presidency  of  General  Grant  commenced,  and  when 
business  was  brisk. 

Another  evidence  of  the  futility  and  falsehood  of  the  state- 
ments of  the  leaders  of  the  Democratic  party  is,  that  since  1875,. 
when  the  Resumption  Act  was  passed,  we  have  had  a  law 
authorizing  free  banking,  so  that  any  man  is  free  to  enter  the 
banking  business,  and  issue  currency  on  the  reasonable  terms 
of  that  act  by  giving  the  security  which  the  law  requires  to 
protect  the  holders  of  the  currency  issued.  If  there  were  really 
any  actual  demand  for  a  greater  amount  of  currency  .than  now 
exists,  there  would  be  inducements  for  men  of  capital  to  enter 
into  the  banking  business  under  the  law  of  Congress  authorizing 
free  banking,  and  issue  more  currency.  This  is  a  demonstration 
that  the  outcry  against  contraction  of  the  currency  is  wholly 
groundless,  and  a  mere  trick  of  the  stump.  Hard  times,  there- 
fore, are  not  caused  by  want  of  more  paper  money.  Really/, 
good  times,  ought  not  to  be  expected  until  we  have  returned  to 
the  standard  currency  of  the  world,  based  upon  gold  and  silver 


.28  THE    POLICY   OF    RESUMPTION. 

Until  such  return,  there  will  necessarily  be  apprehension  and 
fluctuation.  The  suspension  has  been  too  long,  and  creates 
distrust.  Gold  and  silver  have  measured  the  values  of  all 
nations,  from  the  beginning  of  civilization.  The  business  men 
of  the  country,  and  the  people  are  conscious  that  any  cur- 
rency not  based  upon  gold  and  silver,  is  irregular ;  and  that  the 
financial  affairs  of  the  country  will  never  be  at  rest  until  it  re- 
turns to  its  historical  money.  Capitalists  are  cautious  how  they 
allow  their  funds  to  go  out  on  such  long  credits  as  are  necessary 
to  the  encouragement  of  enterprise  in  business,  and  enterprising 
men  without  capital,  are  not  willing  to  go  into  business  on  bor- 
rowed capital  for  a  like  reason.  Confidence  is  a  great  matter 
in  finance. 

As  the  time  approaches  for  the  resumption  of  specie  pay- 
ments under  the  act  of  1875,  the  Democratic  leaders  of  Ohio, 
forgetting  that  their  party  helped  to  pass  the  act,  though  some 
opposed  it  because  it  delayed  resumption  too  long,  denounce  it 
because  it  fixes  a  day  for  resumption,  and  demand  its  repeal. 
"Resumption  may  be  a  good  thing,  but  the  fixing  a  time  when 
it  shall  come,  is  ruinous."  By  a  singular  infelicity  these  eloquent 
^orators  have  referred  to  France  as  authority  in  favor  of  their 
claim  for  paper  money,  and  as  an  example  of  what  they  regard 
wisdom  in  affairs  of  finance  and  currency,  overlooking  again  the 
important  fact  that  France  has  seta  day,  the  1st  day  of  January, 
1878,  for  the  resumption  of  specie  payments,  and  that  the  finan- 
cial world  expects  the  return  of  France  to  specie  payments  on 
that  day  with  the  same  confidence  that  it  expects  the  next  New 
Year. 

The  day  fixed  by  our  law  is  one  year  later,  January,  1879. 
In  this  we 'follow  not  the  example  of  France  only,  but  of  every 
country  that  has  ever  resumed  specie  payments,  after  having 
once  embarked  upon  the  uncertain  tide  of  irredeemable  paper. 
It  is  important  that  the  financial  world  and  the  people  should 
know  when  that  great  event  is  to  occur,  in  order  to  prepare  and 
be  ready  for  it.  It  is  now  manifest  that  all  the  various  interests 
of  the  country  are  preparing  for  this  necessary  event.  The 
greenbacks  are  approaching  gold  in  value,  and  it  is  no  longer 
difficult  to  foresee  that  before  the  1st  day  of  January,  1879, 
they  will  be  equal,  to  the  infinite  advantage  of  every  kind  of 
industry,  and  to  the  disadvantage  only  of  croaking  politicians. 


THE    POLICY    OF    RESUMPTION.  2C) 

None  will  be  more  benefited  than  the  workingmen  of  the 
country.  Capital  will  no  longer  doubt  and  hesitate,  but  will 
go  into  business  enterprises,  and  the  workingman  will  receive 
the  reward  of  his  labor  in  the  same  currency  that  pays  the 
interest  of  the  bondholder.  The  young  giant  of  American  in- 
dustry may  well  be  timid  while  wafted  about  in  the  balloon 
of  paper  money,  but  when  he  shall  once  more  stand  upon  the 
solid  ground,  he  will  resume  his  natural  strength  and  vigor. 

I  have  said  that  the  allusion  by  Mr.  Ewing  to  France  as  fur- 
nishing an  example  in  favor  of  the  financial  policy  which  he 
advocates  against  resumption,  and  against  the  fixing  of  a  day 
for  resumption,  was  unfortunate,  because  France  is  about  to 
resume,  and  has  long  since  fixed  the  day  of  resumption.  But 
his  allusions  to  the  financial  history  of  France,  and  to  that  of 
England,  are  equally  unfortunate,  for  the  reason  that  in  the 
long  experience  of  each  of  those  countries,  the  ruinous  con- 
sequences of  his  policy  of  an  irredeemable  paper  currency, 
have  been  demonstrated  beyond  doubt  or  dispute.  It  was  in 
France,  where  John  Law  as  the  Comptroller  General  of  the 
Finances  of  the  Kingdom,  first  introduced  his  "system"  of 
an  irredeemable  paper  currency,  more  than  a  hundred  and  fifty 
years  ago.  He  was  annoyed  by  the  tendency  of  gold  and 
silver  to  go  abroad. 

He  said : 

"BUT  HERE  IS  THE  SOVEREIGN  REMEDY  FOR  THIS  ILL;  IT  IS 
TO  GIVE  THE  PEOPLE  A  SIGN  OF  TRANSMISSION  [currency]  OF 
WHICH  THE  MATERIALS  SHALL  BE  OF  NATIVE  GROWTH,  THE  VOL- 
UME OF  WHICH  THE  PRINCE  MAY  AUGMENT  AND  DIMINISH,  IN 
ACCORDANCE  WITH  THE  WANTS  OF  THE  STATE  AND  OF  COM- 
MERCE, AND  ABOVE  ALL  WHICH  SHALL  HAVE  NO  INTRINSIC 

VALUE."  Lettres  sur  le  Xouvcau  Systcme  des  Finances.  Econo- 
mists Financiers  du  XV I  I  line  Sicclc,  p.  675.  Paris,  1843.  Gnil. 
lauoinie. 

Nothing  could  more  precisely  express  the  idea  of  the  Dem- 
ocratic financial  platform  of  1875,  if  we  substitute  "the  Con. 
gress"  for  "the  Prince."  And  if  we  are  to  take  the  opening 
speech  of  Mr.  Ewing  as  a  fair  representation  of  the  Democratic 
platform  in  the  present  year,  we  are  bound  to  conclude  that  the 
same  hostility  to  a  sound  currency,  redeemable  in  coin,  controls 
the  Democratic  party  now.  Neither  Mr.  Law,  as  "Comptroller 


30  THE    POLICY    OF    RESUMPTION. 

General  of  the  Finances  of  France,"  looked  for  resumption  of 
specie  payments  at  any  time,  nor  does  Mr.  Ewing,  or  the  Dem- 
ocratic party  of  Ohio  look  for  specie  payments;  but,  on  the  con- 
trary, they  both  and  equally  would  ' '  give  the  people  a  currency 
of  which  the  materials  shall  be  of  native  growth,  the  volume  of 
which  the  Prince,  or  the  Legislature  may  augment  and  diminish, 
in  accordance  with  the  wants  of  the  State  and  of  commerce, 
and  above  all,  which  shall  have  no  intrinsic  value."  Law  had 
intelligence,  a  fervid  zeal  and  great  financial  ability,  with  the 
whole  power  of  France  to  sustain  his  plan.  It  is  not  necesssry 
that  I  should  detail  the  working  of  his  "system,"  as  it  has 
always  been  called.  It  went  into  operation  with  the  highest 
hope,  promising  relief  to  all  the  distressed  classes  and  to  the 
State.  For  a  brief  period  it  gave  apparent  prosperity,  but  in 
a  few  years  ended  in  general  financial  ruin  and  misery  to  all 
grades  of  people,  from  which  they  slowly,  but  gradually  re- 
covered, by  industry  and  by  specie  payments. 

But  some  seventy  years  afterward,  this  same  France,  in  the 
time  of  the  famous  revolution  of  1789,  was  again  lured  into 
the  adoption  of  the  same  principle  of  irredeemable  paper  money, 
under  a  more  specious  form.  The  Government  had  confiscated 
the  real  property  of  the  Church  and  priesthood  to  an  enormous 
amount,  estimated  at  four  thousand  millions  of  francs.  It  was 
urged  in  the  French  Chamber  of  Deputies,  by  the  renowned 
Mirabeau  and  others,  that  the  paper  issued  as  circulation  known 
as  assignats,  based  upon  this  vast  amount  of  public  property, 
would  be  secure,  and  as  good  currency  as  gold  and  silver  coin. 
An  issue  of  four  hundred  millions  was  authorized,  which  was 
made  by  law  the  limit.  It  awakened  speculation,  and  created 
high  hope  of  business  prosperity.  It  was  soon  exhausted,  how- 
ever, and  the  cry  was  raised  for  another  issue,  which,  after  long 
deliberation  and  debate,  with  full  consideration  of  the  past  ex- 
perience of  the  Nation,  was  authorized,  but  another  limit  was 
solmnly  fixed  by  the  statute  at  1,2*'  ,000,000  francs.  As  soon 
as  the  business  and  prices  had  beer-  •  adjusted  to  that  amount 
of  currency,  hard  times  came  on  ain,  and  the  irrepressible 
clamor  arose  for  more  money.  r  a  mighty  struggle  the 

House  of  Delegates  again  yielded          !  one  issue  after  another 
succeeded,  until  nine  thousand   m.  had  been  issued.      The 

public  had  lost  all  confidence  in  i  it  was  worthless.      An 


THE    POLICY    OF    RESUMPTION.  3! 

attempt  was  then  made  to  revive  the  credit  of  the  country,  by 
specifically  pledging  the  vast  amounts  of  property  of  the  nobility, 
which  had  been  confiscated  by  the  Government,  to  secure  the 
issue  of  a  new  paper  under  the  name  of  mandats.  They  were 
doomed  to  the  same  utter  and  disastrous  failure*  which  had  fol- 
lowed the  assignats.  No  prosperity  came  to  France,  till  it  was 
worked  out  through  the  medium  of  gold  and  silver,  in  which  all 
business  men  had  confidence. 

By  these  great  historic  lessons  France  has  been  taught  to 
avoid  irredeemable  paper  currency,  and  that  if  in  any  great 
emergency,  like  the  German  invasion,  or  like  our  own  American 
civil  war,  it  is  necessary  for  a  temporary  purpose  to  borrow 
money  under  the  form  of  a  paper  currency,  the  Government 
should  immediately  determine  to  return  to  specie  payments,  fix 
a  reasonable  day  for  that  purpose,  and  work  resolutely  and  in- 
flexibly to  that  end.  The  French  Government,  acting  upon 
that  principle,  when,  in  1871,  it  was  compelled  to  issue  paper 
money  in  order  to  pay  a  thousand  millions  of  dollars  in  gold  to 
Germany,  immediately  determined  to  return  to  specie  payments 
in  six  years,  and  fixed  the  ist  day  of  January,  1878,  as  the  day, 
and  the  policy  of  the  gradual  contraction  of  the  paper  currency 
was  openly  declared,  adopted  and  carried  out.  The  people  of 
France  and  the  financial  world  understand  the  sincerity  and  de- 
termination of  the  French  Government,  and  have  no  doubt  that 
resumption  will  come,  as  provided  by  law.  Meantime,  French 
industry  was  never  more  active  and  prosperous,  and  the  paper 
currency  which  was  destined  to  be  equal  to  gold  and  silver  on 
the  ist  day  of  January,  1878,  has  become  so  already,  in  antici- 
pation of  that  day,  without  shock  to  business  or  any  just  com- 
plaint from  the  rich  or  the  poor. 

We  need  no  stronger  argument  in  support  of  the  Republican 
policy  of  a  recurrence  to  specie  payments.  The  ist  of  January, 
1879,  will  be  about  seventeen  years  after  our  suspension  in  1862. 

The  example  and  the  argument  derived  from  the  history  of 
France  are  complete,  to  show,  not  that  in  an  overwhelming 
emergency  credit  money  may  not  be  issued,  but  that  it  can  be 
justified  only  by  such  an  emergency,  and  that,  when  issued, 
the  Government  is  bound  to  provide,  at  the  earliest  practicable 
moment  for  specie  payments.  That  no  unnecessary  shock  may- 
be produced,  a  day  should  be  fixed,  by  which  all  the  people  and 


32  THE    POLICY    OF    RESUMPTION. 

the  financial  world  may  know  on  what  to  rely.  France  has 
illustrated  our  case  entirely.  What  effect  do  you  suppose  these 
orators  would  have  upon  the  French  Chamber  of  Deputies,  if 
they  were  to  sound  their  alarm  to  that  body  with  dire  predic- 
tions of  ruin  from  resumption,  and  from  fixing  a  day  and  noti- 
fying the  people  when  it  was  coming? 

I  am  here  reminded  of  the  declaration  of  Napoleon,  when  it 
was  proposed  to  him  to  resort  to  paper  money  in  a  financial 
pressure  caused  by  his  exhaustive  wars.  He  wrote  to  his  Min- 
ister, "  While  I  lire  I  will  never  resort  to  irredeemable  paper" 
And  he  never  did. 

But  they  also  refer  to  England,  as  if  they  could  find  support 
in  British  history.  I  must  not  take  your  time  to  trace  the 
financial  experience  of  that  country.  England  has  been  so 
thoroughly  taught  the  same  lessons  as  France  on  the  subject 
of  irredeemable  paper  currency,  that  these  Democratic  speeches, 
if  made  in  that  country,  would  be  received  with  infinite  derision. 
John  Bull  learns  a  great  deal  more  by  experience,  than  by 
didactic  theories.  The  South  Sea  bubbles  have  made  an  in- 
delible mark  on  his  memory,  and  what  he  regrets  in  regard 
to  his  issue  of  irredeemable  paper  in  1797,  is  that  he  waited 
twenty-five  years  before  resuming.  He  found  that  waiting  so 
long  made  matters  worse,  and  it  became  a  question  with  him 
then,  as  it  is  now  with  us,  whether  resumption  should  pass 
into  the  indefinite  future  and  become  impossible,  or  should  be 
fixed  for  some  reasonable  date,  and  accomplished  as  a  part  of 
the  national  destiny?  What  he  should  also  regret  is,  that 
while  under  the  stupor  of  suspension,  he  suffered  silver  to  be 
demonetized.  To  refuse  to  take  the  necessary  steps  for  a 
return  to  a  sound  and  honest  currency,  would  be  political  in- 
fidelity. 

ii  their  tirade  against  everything  done  by  our  Government, 
these   orators  seek   to  make  a  point  by   comparing  the  rate  of 
taxation,  per  capita,  in  this  country  with  the  rates  in  England, 
in  France  and  in  Austria.       They  omit,   however,    to  mention 
that   we  are  paying  off  our  debt,  and  have  already   reduced   it 
\      many  hundred   millions,    which    England   and   those   other  mon- 
archies never  intend  to  clo  with  theirs.     The   National   debt  is 
Sone  of    their    permanent    institutions,    a    guaranty   of   the    per- 
v^petuity  of  royal  and  aristocratic  power. 


THE    POLICY    OF    RESUMPTION.  33 

Let  it  not  be  supposed  that  the  Republican  party  intends  to 
cast  discredit  upon  the  greenback  currency.  That  currency 
was  issued  for  a  great  and  necessary  purpose,  which  it  has  ful- 
filled, and  the  character  of  the  country  is  identified  with  the 
maintenance  of  its  credit.  Its  existence  reminds  us  of  the 
patriotism  of  the  people,  and  the  devotion  of  all  branches  of 
the  Government  to  the  Union  and  welfare  of  the  country.  The 
greenbacks  which  have  been  issued  are  not  to  be  discarded,  but 
to  be  raised  to  the  standard  that  is  stamped  upon  their  face,  and 
made  equal  to  gold  and  silver.  No  man  has  a  right  to  complain 
of  their  redemption  in  coin,  for  they  bear  on  their  face  the 
promise  of  the  United  States  to  pay  them ;  and  the  Congress 
of  the  United  States,  in  the  act  of  1864,  pledged  the  faith  of  the 
Government  to  the  holders  of  greenbacks  and  to  the  world, 
that  "the  total  amount  of  United  States  notes  issued,  or  to  be 
issued,  should  never  exceed  four  hundred  millions,"  and  in  1869 
Congress  again  pledged  the  faith  of  the  country  to  their  pay- 
ment "in  coin  or  its  equivalent,"  and  to  make  provision,  "at 
the  earliest  practicable  period  for  their  redemption  in  coin,"  and 
in  1875,  in  pursuance  of  its  numerous  promises  already  made, 
and  already  too  long  deferred,  again  promised  that  they  should 
be  made  redeemable  in  gold  and  silver,  on  and  after  the  1st  day 
of  January,  1879.  Both  creditors  and  debtors  therefore,  and 
the  business  world  have  had  due  and  timely  notice  of  the  re- 
sumption of  specie  payments  under  the  existing  law.  When 
the  process  of  equalizing  the  value  of  greenbacks  and  coin  shall 
be  complete,  and  they  are  redeemable  in  gold  and  silver,  the 
motive  of  returning  them  to  the  Treasury  will  cease,  and  they 
will  undoubtedly  remain  in  circulation  as  currency,  making  as 
good  a  currency  as  this  or  any  other  country  ever  had.  It 
would  rest  upon  the  same  foundation  of  National  credit,  which 
that  portion  of  the  circulation  of  the  Bank  of  England  rests, 
that  does  not  represent  the  deposit  of  gold  and  silver  in  the 
bank — that  is  to  say,  there  is  issued  by  the  Bank  of  England 
an  amount  equal  to  seventy-five  millions  of  dollars,  which 
rests  upon  the  credit  of  the  Nation;  beyond  that,  the  paper 
issued  represents  the  specie  deposited  in  the  bank.  Our  green- 
backs would  have  this  advantage  over  the  similar  circulation  in 
England,  that  our  Constitution  precludes  any  increase  in  the 
volume  of  that  kind  of  paper,  in  time  of  peace,  while  our 


34  THE    POLICY    OF    RESUMPTION. 

Government  is  bound  to  keep  in  the  treasury  sufficient  specie 
to  make  its  paper  at  all  times  redeemable  in  coin. 

Let  no  man  suppose,  however,  that  greenbacks  are  to  be  the 
only  currency  used  in  the  transaction  of  business.  After  the 
day  of  resumption,  all  the  paper  that  shall  be  in  circulation,  or 
that  shall  be  issued  by  whatever  authority  of  law,  will  no  longer 
be  irredeemable,  but  will  be  convertible  into  coin  at  the  option 
of  the  holder.  Undoubtedly  the  resumption  of  specie  pay- 
ments will  bring  into  use  large  amounts  of  gold  and  silver,  so 
that  the  currency  of  the  country,  by  the  addition  of  coin, 
together  with  the  greenbacks  that  shall  remain  in  circulation, 
and  the  bank  paper  redeemable  in  gold  and  silver,  will  make  a 
currency  ample  to  meet  the  wants  of  trade. 

I  should  have  much  greater  apprehensions  as  to  the  success 
of  specie  payments,  if  I  did  not  suppose  that  Congress  would 
feel  the  urgent  importance  of  restoring  the  silver  dollar  to  its 
old  place  among  our  national  coins  as  a  full  legal  tender.  I  shall 
not  take  your  time  this  evening  to  discuss  the  general  grounds 
upon  which  I  recommend  the  remonetization  of  silver.  But 
there  can  be  no  reasonable  doubt  that  the  silver  dollar  may  be 
efficiently  and  constitutionally  used  in  the  redemption  of  green- 
backs and  in  the  payment  of  our  debts.  By  the  Resumption 
act,  which  pledged  the  Government  to  return  to  specie  payments 
January  1 ,  1 879,  the  greenbacks  are  made  already  to  approach 
gold  in  value,  and  will  soon  be  equal  to  it.  By  the  same 
token,  if  Congress  shall  remonetize  the  silver  dollar  it  will 
directly  be  found  equal  to  both  paper  and  gold.  I  am  pleased 
to  see  that  even  Mr.  Wells,  who  represents  the  American  mo- 
nometallists,  admits  that  such  an  act  will  bring  silver  to  par  with 
gold  at  our  legal  ratio  of  16  to  i.  I  think  so  too. 

Considering  the  abundant  product  of  our  own  silver  mines, 
the  hope  of  procuring  silver  from  abroad,  the  gold  we  have  on 
hand,  and  that  which  we  also  produce,  the  credit  of  our  bonds, 
the  accumulating  surplus  of  our  revenues,  the  balance  of  trade 
in  our  favor,  the  unbounded  wealth,  present  and  prospective, 
of  the  Nation,  and  the  undoubting  faith  of  our  people  in  the 
destiny  of  our  country,  there  can  be  no  failure.  When  the 
Government  shall  have  made  such  preparations  as  it  is  now 
making,  and  as  it  can  make  before  1879,  and  declares  resumption, 
as  it  has  been  commanded  to  do,  and  as  it  has  promised  to  do, 


THE    POLICY   OF    RESUMPTION.  35 

in  all  the  theorizers  and  croakers.,  domestic  and  foreign,  will  resist 
vain.  Seated  in  the  confidence  of  the  American  people,  who  will 
share  in  the  blessings  of  this  great  National  consummation,  the 
United  States  Government  can  defy  the  threats  of  ambitious 
politicians  and  the  predictions  of  theorists  and  speculators,  at 
home  and  abroad,  who,  though  they  all  should  combine  in  one 
grand  effort,  can  no  more  hinder  the  execution  of  this  bene- 
ficent design,  than  could  the  Homeric  gods  and  goddesses,  by 
the  golden  chain  let  down  from  heaven,  drag  Jupiter  from  high 
Olympus. 


Mod)  us 

or 

IRIESTJIMIIPTIOlsr, 

FROM 

Speech  Delivered  at  Toledo,  Sept,  19,  1877, 


I  come  now  to  the  question  of  the  resumption  of  specie  pay- 
ments, which  is  the  most  important  issue  at  the  present  time 
between  the  two  parties.  We  can  discuss  the  expediency  of  re- 
monetizing  silver  with  the  Democratic  orators,  without  much 
conflict  of  opinion.  The  conflict,  however,  is  developed,  when 
we  consider  what  use  is  to  be  made  of  the  re-monetized  silver. 
The  Democratic  party  propose  the  immediate  repeal  of  the  Re- 
sumption Act,  and  make  no  provision  for,  or  suggestion  of  a  re- 
turn to  specie  payments  at  any  time.  In  its  platform  of  1875,  ^ 
proposed  to  repeal  the  time  fixed  for  resumption,  and  merely  hint- 
ted  at  the  possibility  of  growing  up  to  specie  payments,  at  some 
indefinite,  if  not  impossible  time,  in  the  future.  But  now  the 
party  has  ceased  to  talk  of  resumption,  except  to  urge  the  repeal 
of  the  only  provision  that  has  been  made  for  it.  Its  platform 
and  its  orators,  propose  at  one  and  the  same  time,  the  retention 
of  the  greenback  currency — the  remonetization  of  silver,  and  the 
indefinite  postponement  of  specie  payments. 

The  first  question  that  arises  on  this  complex  proposition  is : 
How  would  the  country  be  any  better  off,  than  it  is  now?  With- 
out specie  payments,  silver  coin  would  no  more  come  into  use, 
than  gold.  The  Republican  party  on  the  other  hand  proposes 
to  make  the  re-monetized  silver  immediately  available  in  the 
preparation  for,  end  in  the  accomplishment  of  a  sound  currency 
of  silver  and  gold,  and  of  paper  convertible  into  silver  and  gold 
at  the  option  of  the  holder.  Here  is  a  direct  issue  between 
the  two  parties. 

I  claim  that  the  Democratic  plan  is  inert :  that  it  can  furnish 
no  relief  nor  encouragement  to  me  business  community,  while  it 
exposes  the  country  to  the  demoralizing  effects  of  irredeemable 


MODUS   OPEfcANDl    OF    RESUMPTION.  37 

paper,  and  to  mortifying  comparisons  and  losses  when  we  deal 
with  foreign  countries.  On  the  other  hand  I  claim,  and  hope  to 
make  it  clear  to  every  candid  listener,  that  by  the  plan  of  resump- 
tion with  both  the  precious  metals  and  redeemable  paper,  we  can 
make  silver  as  well  as  gold  immediately  useful,  in  awakening 
new  energy  in  business,  with  new  encouragement  to  industry. 
and  in  diffusing  general  prosperity, 

Before  proceeding  further  let  us  inquire  what  that  resumption 
is,  for  which  the  act  of  I4th  Jan.,  1875,  provides.  The  lan- 
guage of  the  Act  is,  that  "after  Jan.  1st,  1879,  tne  Secretary  of 
of  the  Treasury  shall  redeem  in  coin,  the  United  States  legal  ten- 
der notes  then  outstanding  on  their  presentation  for  redemption, 
at  the  Office  of  the  Assistant  Treasurer  of  the  United  States  in 
the  city  of  New  York,  in  sums  not  less  than  fifty  dollars." 

"And  to  enable  the  Secretary  of  the  Treasury  to  prepare  and 
provide  for  the  redemption  in  this  .act  authorized  or  required,  he 
is  authorized  to  use  any  surplus  revenues  from  time  to  time,  in 
the  Treasury  not  otherwise  appropriated,  and  to  issue,  sell,  and 
dispose  of,  at  not  less  than  par,  in  coin,  either  of  the  descriptions 
of  bonds  of  the  United  States  described  in  the  act  of  Congress, 
approved  July  I4th,  1870,  entitled  an  Act  to  authorize  the  refund- 
ing the  National  debt,  with  like  qualities,  privileges,  and  exemp- 
tions, to  the  extent  necessary  to  carry  this  act  into  full  effect, 
and  to  use  the  proceeds  thereof  for  the  purposes  aforesaid.  And 
all  provisions  of  law  inconsistent  with  the  provisions  of  this  act 
are  hereby  repealed." 

It  thus  appears,  that  the  United  States  by  this  resumption  Act 
provides  for  the  "  redemption  of  the  United  States  notes  on  their 
presentation  for  redemption  at  the  office  of  the  Assistant  Treas- 
urer of  the  United  States  in  the  city  of  New  York."  And  this 
is  the  resumption,  for  which  the  Republican  Administration  is 
now  preparing,  and  which  the  Democratic  party  denounces. 

But  this  redemption  does  not  retire  from  circulation,  or  cancel 
the  greenbacks  so  presented  and  redeemed.  By  section  3579  of 
the  Revised  Statutes  of  the  United  States,  it  is  provided  "  that 
when  the  United  States  notes  are  returned  to  the  Treasury, 
the  public  interest  may  require."  By  section  3582,  it  is  pro- 
they  may  be  re-issued,  from  time  to  time,  as  the  exigencies  of 
vided  "  that  the  authority  given  to  the  Secretary  of  the  Treasury 
to  make  any  reduction  of  the  currency,  by  retiring  and  cancelling 


38  MODUS    OPERANDI    OF    RESUMPTION 

United  States  notes,  is  suspended."  The  effect  of  the  resump- 
tion act  taken  in  connection  with  these  provisions  of  the  Revised 
Statutes  would  seem  to  be,  that  the  redemption  of  the  U.  S. 
notes  under  this  act  does  not  prevent  the  Secretary  of  the  Treas- 
ury from  using  them  as  money,  and  keeping  them  in  circulation. 
This  provision  for  the  redemption  of  greenbacks  by  the  Govern- 
ment, is  to  be  construed  like  that  which  requires  each  National 
bank  to  select  a  bank  "  in  the  city  of  New  York,  at  which  it  will 
redeem  its  circulating  notes  at  par."  The  object  of  the  redemp- 
tion, is  not  to  stop  the  circulation  of  the  paper,  but  to  preserve 
its  credit,  and  make  it  circulate  more  freely.  This  is  evidently 
the  construction  adopted  by  the  Secretary  of  the  Treasury,  and 
upon  which  he  is  preparing  to  act,  on,  and  after  the  ist  of 
January,  1879,  as  we  learn  from  his  speech  recently  made  at 
Marion. 

The  language  of  the  ist  section,  which  applies  to  and  provides 
for  the  redemption  of  "  fractional  currency  "  is  such,  that,  although 
the  word  "redemption  "  is  used,  the  obvious  meaning  is,  that  the 
fractional  currency  shall  be  taken  up  with  the  silver  change,  or 
subsidiary  coin.  No  man  can  doubt  the  meaning,  who  reads  it. 
The  process  of  redemption  is  to  go  on,  ' '  until  the  whole  amount 
of  such  fractional  currency  outstanding  shall  be  redeemed."  The 
plain  implication  is  that  there  shall  be  none  left  outstanding. 

The  same  may  be  said  of  the  use  of  the  term  ' '  redemption 
of  United  States  notes'*  in  connection  with  the  increase  of  bank 
circulation  in  the  3d  section  of  the  same  act,  till  the  total  is  re- 
duced to  $300,000,000.  Here  there  can  be  no  doubt,  because 
"the  reduction"  of  the  volume  of  greenbacks  is  expressly  pro- 
vided for,  and  the  limit  of  reduction  is  fixed  at  $300,000,000. 
The  provision  for  redemption  on  the  ist  January,  1879,  does 
not  require  any  reduction  of  the  greenback  currency. 

By  the  act  of  April  12,  1866..  (14  Sts.  U.  S.  32.  c.  39.  52.) 
the  Secretary  of  the  Treasury  was  authorized  to  receive  United 
States  notes  for  bonds,  "  provided,  that  of  United  States  notes  not 
more  than  ten  millions  of  dollars  may  be  retired  and  cancelled 
within  six  months  from  the  passage  of  this  act,  and  thereafter, 
not  more  than  four  millions  in  any  month."  This  power,  was 
e.  ercised  till  $44,000,000  were  taken  up.  But  they  were  not 
destroyed.  The  proviso  impliedly  authorized  the  "cancellation" 
of  four  millions  per  month:  There  is  no  provision  for  cancella- 


MODUS    OPERANDI    OF    RESUMPTION.  39 

tion,  or  retirement  of  the  United  States  notes,  in  the  clause  of  the 
act  of  1875  for  the  redemption  of  United  States  notes  presented 
in  New  York.  The  $44,000,000  thus  redeemed  were  not  can- 
celled, however,  but  remained  in  the  Treasury  till  1873,  when 
the  panic  swept  over  the  country  like  a  tornado.  The  Secretary 
of  the  Treasury,  then,  re-issued  $26,000,000  of  the  $44,000,000 
so  redeemed. 

The  objection  that  such  a  re-issue  of  the  United  States  notes 
redeemed  after  January  1st,  1879,  would  be  forbidden  by  the 
constitution,  is  obviated  by  considering  the  limit  of  that  object- 
ion, as  expressed  by  the  judges  of  the  Supreme  Court  in  deciding 
the  question  of  the  validity  of  the  legal  tender  notes  to  pay  debts. 
The  objection  was  not,  that  Congress  could  not  make  a  paper 
currency,  but  that  it  could  not  constitutionally  make  such  a  cur 
rencyalegal  tender  to  pay  pre-existing  debts,  excepting  in  case  of 
an  overwhelming  emergency  such  as  was  our  civil  war ;  and  the 
reason  of  the  objection  was,  that  it  was  compelling  creditors  to 
accept  in  payment,  a  currency  less  valuable  than  that  contemp- 
lated by  the  contract,  viz :  irredeemable  paper.  Now,  the  con- 
tinuance of  the  use  of  a  paper  currency  which  has  long  been  in 
use,  stands  on  entirely  different  ground,  and  the  objection  will 
not  lie,  unless  Congress  should  attempt  to  increase  the  volume 
of  that  currency,  by  new  issues,  so  as  to  diminish  its  value.  In 
that  event,  the  constitutional  objection  would  arise,  to  any  such 
new  issue.  But  the  law  as  existing,  contemplates  the  volume  of 
greenbacks  as  a  currency  provided  by  congress,  expressly  limi- 
ted to  $400,000,000,  reducible  to  $300,000,000  on  the  issue  of 
bank  paper,  as  provided  by  the  resumption  act.  But  there  is 
still  another  answer  to  the  suggestion  of  unconstitutionally, 
viz :  that  this  paper  will  be  always  convertible  into  coin. 

While  the  Government  might  not  to  be  compelled  by  the  law 
as  it  stands,  to  re-issue  all  notes  redeemed  in  New  York,  any- 
more than  it  would  be  compelled  to  re-issue  all  notes  which  may 
be  returned  to  the  treasury  by  payment  of  taxes  or  otherwise,  it 
will  be  authorized  to  regard  them  as  legitimate  currency,  and 
to  use  them  as  such. 

The  Secretary  of  the  Treasury  makes  no  allusion  to  th< 
monetization  of  the  silver  dollar.      He  took  the  law  as  it  stun 
But  this  measure  of  remonetization  will  greatly  facilitate  the  re- 
demption which  the  law  requires. 


4O  MODUS    OPEKANDI    OF    RESUMPTION. 

Allow  me  now  to  suggest  a  modus  operandi,  or  manner  in  which 
this  plan  can  be  carried  into  effect. 

1st.  Congress  should  remonetize  the  old  silver  dollar  contain- 
mg  37 l  V±  g^ins  of  pure  silver.  There  is  already  a  law  for  casting 
bars  of  silver,  and  of  gold,  with  the  government  stamp  thereon 
showing  their  weight  and  value.  It  is  not  probable  that  there 
will  be  any  effectual  opposition  to  this,  or  some  equivalent  measure. 

2nd.  Let  the  Secretary  of  the  Treasury  go  on  with  the  sale 
of  the  United  States  Bonds,  for  both  gold  and  silver.  Let  him 
not  fail  to  accumulate  from  $100,000,000  to  $200,000,000  in 
silver,  in  addition  to  the  $50,000,000  already  required  by  law  for 
subsidiary  coinage.  Let  him  also  go  on  with  his  accumulation 
of  gold  of  which  he  already  has  more  than  $120,000,000. 

On  or  before  Jan.  1st,  1879,  ^et  a  sufficient  amount  of  coin  be 
placed  in  the  Office  of  the  Assistant  Treasurer  of  the  United 
States  in  New  York,  to  redeem  all  the  U.  S.  notes  which  may  be 
presented,  as  the  law  requires.  Such  notes  will  be  put  immediate- 
ly into  circulation  again,  if  the  Government  shall  have  occasion 
to  use  them,  in  the  same  manner,  as  a  bank  re-issues  its  notes 
which  have  been  presented  for  redemption,  thus  in  all  probabili- 
ty, keeping  the  greenback  circulation  nearly,  and  perhaps  quite 
as  large  as  it  is  at  the  present  time,  and  far  more  useful,  as  it 
would  be  convertible,  and  therefore  always  equal  to  gold  and 
silver.  This  is  undoubtedly  practicable.  The  Government  can 
and  ought  to  do  it,  and  I  cannot  doubt  that  it  intends  to  do  it, 
and  is  willing,  and  waiting  to  do  it.  We  may  fairly  infer  this, 
from  the  declarations  of  the  Secretary  of  the  Treasury,  in  the 
speech  to  which  I  have  referred. 

We  are  now  prepared  to  understand  the  real  difference  be- 
tween the  policy  of  the  Democratic  party,  and  that  of  the  re- 
publican Administration,  on  the  all  important  question  of  what  is 
to  be  done  with  the  greenbacks. 

The  Democratic  party  would  keep  them  irredeemable.  The 
Republican  will  make  them  always  convertible  into  silver  and 
gold,  than  which  no  better  currency  for  the  business  man,  the 
working  man,  or  the  capitalist,  can  be  imagined.  This  paper  will 
be  equal  to  gold.  The  Treasury  will  be  so  fortified  with  the  pre- 
cious metals  as  to  be  impregnable,  and  its  known  ability  to 
meet  all  demands  for  coin  will,  ordinarily,  leave  no  motive  in 
the  holders  of  greenbacks  to  present  them.  The  reserve  which 


MODUS    OPERANPI    OF    RESUMPTION.  4! 

the  National  Banks  hold  in  greenbacks  will  be  equivalent  to 
coin,  and  the  banks  will  be  able  to  supply  themselves  with  coin 
as  easily  as  with  paper. 

Capital  will  go  into  business  enterprises,  without  fear  of  loss 
by  depreciation  of  the  currency.  Enterprizing  business  men 
will  not  fear  to  effect  loans  for  the  purpose  of  commencing,  or 
carrying  on  manufacturing  establishments,  because  the  currency 
which  they  borrow  will  be  as  good  as  the  currency  which  they 
will  have  to  pay.  The  waives  of  labor  and  the  interest  on  capital 
will  be  paid  in  the  same  kind  of  money,  and  not  as  hitherto,  in 
gold  to  the  bond  holder,  and  in  depreciated  paper  to  the  working 
man.  I  maintain,  that  this  policy  will  produce  the  grand  confi- 
dence, which  is  necessary  to  carry  forward  the  business  of  the 
country,  encourage  every  kind  of  industry,  and  give  profitable 
employment  to  all  who  are  willing  to  work. 

Of  the  practicability  of  making  the  United  States  notes  redeem- 
able as  we  propose,  there  is  no  good  reason  to  doubt.  The  Sec- 
retary of  the  Treasury  expresses  entire  confidence  of  success,  and 
that  without  reference  to  the  aid  to  come  from  silver.  But  there 
is  a  felicity  in  the  accumulation  of  silver  at  the  present  time, 
which  could  not  under  other  circumstances  exist.  Nothing 
could  be  safer  than  for  the  government  to  hoard  silver,  as  soon  as 
it  shall  be  re-monetized.  It  is  about  10  per  cent,  below  par- 
However  it  might  be  with  others,  it  is  sure  to  be  a  profitable  in- 
vestment for  the  United  States.  The  government  will  have  use 
for  all  it  can  get,  at  par.  I  am  glad  to  observe,  that  the  govern- 
ment is  now  buying  silver  bars,  by  the  million  of  ounces.  This, 
I  suppose  is  in  pursuance  of  the  law  authorizing  the  purchase  of 
$50,000,000  of  silver  for  subsidiary  coinage.  There  is  also  power 
to  coin  the  trade  dollar  with  378  grains  of  pure,  and  420  grains 
of  standard  silver,  intended  for  use  in  Asia.  I  presume,  that 
the  government  will  see  to  it,  that  no  more  bullion,  whether  of 
silver  or  of  gold  shall  go  from  our  mines  to  Europe. 

Our  silver  will  facilitate  our  trade  with  the  Asiatic  markets^ 
and  may  enable  us  to  compete  successfully  in  that  great  field, 
with  England.  We  need  have  no  fear  of  accumulating  too  much 
of  that  metal.  The  result  will  be  that  our  silver  coin  will  be  as 
valuable  as  our  gold,  and  that  we  can  pay  the  bonds  as  easily  in 
gold  as  in  silver. 

There  is  reason  to  suppose  that  the  growth  and  renewed  activ- 
ness  of  the  business  of  the  country,  and  its  commerce  aided  by 


42  MODUS    OPERANDI    OF    RESUMPTION. 

resumption,  may  furnish  employment  for  a  volume  of  currency  as 
large  as  we  now  have.  At  any  rate,  what  with  coin  which  will 
be  largely  in  circulation,  the  Greenbacks  which  will  not  be  can- 
celled, and  the  paper  of  the  National  banks,  there  can,  and  will  be 
no  failure  in  the  supply  of  currency  for  the  wants  of  trade,  and 
the  encouragement  of  every  useful  enterprize. 

I  have  no  doubt  that  the  present  policy  of  the  administration 
is,  to  keep  the  greenbacks  in  circulation.  The  capacity  of  the 
country  is  probably  equal  to  the  employment  of  so  much  cur- 
rency. The  advantage  of  the  policy  will  be  that  the  currency 
will  be  elastic,  and  will  expand  or  contract  to  meet  the  just 
demands  of  healthful  trade.  Coin  will  be  in  circulation,  and 
will  come  as  it  is  needed.  The  banks  too,  will  issue  currency 
as  it  shall  be  needed.  There  would  be  danger  of  greater  ex- 
pansion than  would  be  wholesome,  but  for  the  universal  test  of 
redeemability  in  coin.  While  that  quality  remains,  our  currency 
will  not  be  for  any  considerable  time,  disproportioned  to  the 
reasonable  demands  of  our  trade  and  capital. 

With  the  present  immense  agricultural  products  of  this  coun- 
try, with  the  products  of  our  mines  of  gold  and  of  silver,  of  cop- 
per and  of  iron,  with  our  varied  and  vast  manufactures  which 
have  been  reasonably  fostered  only  by  the  republican  party,  and 
which  have  employed  and  still  employ  armies  of  workmen,  and 
with  the  large  balance  of  trade  with  foreign  countries  in  our  fa- 
vor, a  balance  which  by  the  short  crops  and  the  long  war  in 
Europe  is  sure  to  increase,  specie  payments  will  be  reached,  not 
only  without  shock  to  business,  but  with  universal  encourage- 
ment, and  with  actual  exhilaration  of  industry  and  enterprize. 


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FORM  NO.  DD6,  40m,  3/78  BERKELEY,  CA  94720 


®s 


Stockton,  Calif. 
T.  M.  Reg.  U.S.  Pat.  Off. 


THE  UNIVERSITY  OF  CALIFORNIA  LIBRARY 


